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Estate Tax Calculator

Federal & State Estate Tax — 2025 Rates with TCJA Sunset Warning

Estate Details

$
Sum of all assets: real estate, investments, retirement accounts, life insurance, business interests

Deductions

$
Assets passing to surviving U.S. citizen spouse — fully deductible (unlimited)
$
$
1%5%
$
$
Gifts exceeding the annual exclusion ($19k/person/year) in prior years
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TCJA Sunset Warning The $13.99M TCJA exemption expired Dec 31, 2025. Under the post-sunset ~$7M exemption, your estate could owe $0 in additional federal tax.
Total Estate Tax Owed
$0
Below federal exemption — no federal estate tax
0.0% effective rate
Gross Estate
$5,000,000
Taxable Estate
$4,885,000
Exemption Remaining
$13,990,000
Federal Tax
$0
State Tax
$0
Heirs Receive
$4,885,000
Chart: donut chart.
Taxable Estate = Gross − Deductions − Exemption
Federal Tax = Taxable × Bracket Rates (up to 40%)
Net to Heirs = Gross − Fed Tax − State Tax − Charity − Debts

State Estate & Inheritance Tax Comparison

Based on your estate of $5,000,000

Chart: state bar chart.
State Tax Type Exemption Top Rate Est. Tax on Your Estate vs No-Tax State
No estate or inheritance tax: TX, FL, NV, AZ, CO, GA, IN, KS, LA, MI, MS, MO, MT, NH, NM, NC, ND, OH, OK, SC, SD, TN, TX, UT, VA, WY, and more. These states impose $0 additional estate burden.

Estate Tax Planning Strategies

Annual Gift Exclusion Strategy

In 2025, you can give $19,000 per recipient per year — completely free of gift tax and without using your lifetime exemption.

Total estate reduction: $760,000 | Tax saved: $304,000

⏰ TCJA Sunset — Effective January 2026

The $13.99M exemption was historically high due to the Tax Cuts and Jobs Act. As of January 1, 2026, the exemption reverted to approximately $7M per person (inflation-adjusted) unless Congress has extended it. Consult an estate attorney for current law. Planning strategies that may still apply:

  • Spousal Lifetime Access Trusts (SLAT): Make large gifts to an irrevocable trust for your spouse, using up the current high exemption before it expires.
  • Grantor Retained Annuity Trusts (GRAT): Transfer appreciating assets with minimal gift tax, locking in current low interest rate environments.
  • 529 Superfunding: Front-load up to 5 years of annual exclusions ($95k/person or $190k/couple) per beneficiary.
Potential post-sunset federal tax increase: $0

Trust & Insurance Strategies

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ILIT

Irrevocable Life Insurance Trust removes life insurance death benefit from your taxable estate. Life insurance proceeds fund the estate tax bill.

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GRAT

Grantor Retained Annuity Trust transfers future appreciation out of the estate at little to no gift tax cost.

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CRT

Charitable Remainder Trust provides income during life, reduces estate, and leaves remainder to charity — generating an immediate charitable deduction.

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FLP / LLC

Family Limited Partnership or LLC — transfer business/investment assets with valuation discounts of 15–40% for lack of control and marketability.

Life Insurance to Cover Estate Tax

Estimated insurance needed to cover estate tax bill: $0
Held inside an ILIT to keep it out of the taxable estate

Strategy Comparison

StrategyComplexityTax SavingsReversibilityBest For
Annual GiftsLowModerateN/AAll estates
Marital DeductionLowHigh (defer)N/AMarried couples
Charitable BequestLowHighN/APhilanthropic goals
ILITMediumHighNoneLarge life insurance
GRATHighVery HighNoneAppreciating assets
SLATHighVery HighNonePre-sunset planning
FLP / LLCHighHighPartialBusiness owners
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How to Use This Calculator

1

Enter Your Gross Estate

Add up all assets: real estate, investment accounts, retirement accounts, life insurance death benefit, business interests, and personal property.

2

Select Your State

12 states plus DC impose their own estate tax with lower exemptions than federal law. Choose your state of domicile to see combined tax.

3

Enter Deductions

Assets passing to a spouse qualify for the unlimited marital deduction. Charitable bequests, debts, funeral expenses, and admin costs also reduce the taxable estate.

4

Review TCJA Sunset

The current $13.99M exemption expires after 2025. See what your estate would owe under post-sunset rules and explore planning strategies.

Formulas & Methods

Avg Rate

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Slice

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R

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Key Terms Explained

Unified Credit The lifetime exemption amount that shields an estate from federal gift and estate tax. The estate and lifetime gifts share this single credit.
TCJA Sunset The Tax Cuts and Jobs Act doubled the estate tax exemption. This provision expires after Dec 31, 2025 unless Congress extends it.
Portability A surviving spouse can inherit the deceased spouse's unused exemption amount (DSUE), effectively giving a married couple a combined $27.98M exemption in 2025.
Annual Exclusion In 2025, you can give up to $19,000 per recipient per year without reducing your lifetime exemption or incurring gift tax.
ILIT Irrevocable Life Insurance Trust. Holding a life insurance policy inside an ILIT removes the death benefit from your taxable estate.
Marital Deduction An unlimited deduction for assets passing to a surviving U.S. citizen spouse. These assets are not taxed at the first death — but may be taxed at the second death.
Step-Up in Basis Inherited assets receive a new cost basis equal to fair market value at the date of death, eliminating embedded capital gains for heirs.
GRAT Grantor Retained Annuity Trust. A powerful strategy to transfer appreciation out of the estate with minimal gift tax, especially in low-interest-rate environments.

Real-World Examples

SA

Sarah

32-year-old marketing manager saving for her first home

Marital Status
12
Total Gross Estate Value
$60,000
State of Domicile
36
Marital Deduction (Spousal Bequest)
48
Estimated rate
12.4%

Try entering Sarah's values above to see the detailed breakdown.

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Understanding Federal Estate Tax in 2025

The federal estate tax — sometimes called the "death tax" — applies to the transfer of wealth from a deceased person's estate to their heirs. Despite the political controversy surrounding it, relatively few estates actually owe federal estate tax in any given year. In 2025, only estates exceeding $13.99 million per individual (or $27.98 million for a married couple using portability) are subject to federal estate tax. This means the vast majority of Americans will never owe a dollar of federal estate tax under current law.

However, the landscape is about to change dramatically. The Tax Cuts and Jobs Act of 2017 temporarily doubled the estate tax exemption, and this provision is set to expire ("sunset") after December 31, 2025. If Congress takes no action, the exemption will revert to approximately $7 million per individual (adjusted for inflation), potentially exposing millions of additional dollars in wealth to a 40% federal estate tax rate.

How the Federal Estate Tax Works

The federal estate tax uses a graduated bracket system, but because the unified credit effectively eliminates tax on amounts below the exemption threshold, the practical effect is a flat 40% rate on everything above the exemption. The tax is calculated on the "taxable estate," which equals the gross estate minus allowable deductions: the marital deduction, charitable bequests, debts and mortgages, funeral expenses, and administrative expenses.

State Estate and Inheritance Taxes

Even if your estate falls below the federal threshold, you may owe state-level estate or inheritance taxes. Twelve states plus Washington D.C. impose estate taxes, with exemptions ranging from just $1 million in Massachusetts and Oregon to $13.61 million in Connecticut (which mirrors the federal exemption). Separately, six states impose inheritance taxes — paid by the heirs receiving the assets rather than by the estate itself. Maryland is unique in having both an estate tax and an inheritance tax.

Key Planning Strategies

The most effective estate tax planning combines several approaches. The annual exclusion gift ($19,000 per recipient in 2025) is the simplest: each year you can reduce your taxable estate by making gifts to family members or others without using your lifetime exemption. Over time, this "annual exclusion gifting" can significantly erode a large estate. A couple with four adult children and eight grandchildren could transfer $456,000 per year completely tax-free.

For larger estates, irrevocable trusts are the primary tool. The Irrevocable Life Insurance Trust (ILIT) removes life insurance proceeds from the estate, while the proceeds can be used to pay estate taxes without forcing a fire-sale of assets. The Grantor Retained Annuity Trust (GRAT) allows appreciation in assets to pass to heirs with little or no gift tax — particularly powerful for rapidly appreciating assets like business interests or growth stocks.

Given the TCJA sunset risk, advisors are strongly recommending that high-net-worth clients use their current high exemption before it disappears. Spousal Lifetime Access Trusts (SLATs) allow one spouse to make a large gift to an irrevocable trust benefiting the other spouse, using up the current exemption while technically maintaining some access to the funds. This strategy must be done carefully to avoid the "reciprocal trust doctrine."

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Frequently Asked Questions

Advanced Does everyone pay estate tax?
No. In 2025, only estates exceeding $13.99 million (individual) or $27.98 million (married couple with portability) owe federal estate tax. The IRS estimates fewer than 0.1% of deaths result in estate tax liability under current law.
Advanced What assets are included in the gross estate?
The gross estate includes virtually all assets owned at death: real estate, bank accounts, investment portfolios, retirement accounts (IRAs, 401ks), life insurance death benefits (if owned by the decedent), business interests, vehicles, jewelry, and art. It also includes certain assets transferred during life if you retained rights or control over them.
Advanced Are life insurance proceeds taxable for estate purposes?
Life insurance proceeds are generally included in the taxable estate if the decedent owned the policy. However, if the policy is held in an Irrevocable Life Insurance Trust (ILIT), the proceeds pass outside the estate — a major planning technique for large estates.
Basics What is the step-up in basis?
Inherited assets receive a "step-up" in cost basis to the fair market value at the date of death. This eliminates all accumulated capital gains for heirs. For example, stock purchased for $10,000 that is worth $500,000 at death passes to heirs with a $500,000 basis — they owe no capital gains tax on the $490,000 of appreciation.
Basics What is portability and how does it work?
Portability allows a surviving spouse to use the deceased spouse's unused estate tax exemption (DSUE). For example, if Spouse A dies in 2025 with a $3.99M estate using only $3.99M of their $13.99M exemption, Spouse B can "port" the remaining $10M plus their own $13.99M exemption — potentially protecting nearly $24M. A portability election must be made by filing an estate tax return within 9 months of death (or 15 months with extension).
Basics What is the difference between estate tax and inheritance tax?
Estate tax is paid by the estate before assets are distributed to heirs. Inheritance tax is paid by the heirs after they receive the assets. The federal government only has an estate tax. Six states (IA, KY, MD, NE, NJ, PA) have inheritance taxes, and Maryland has both.
Basics When must an estate tax return be filed?
Form 706 (United States Estate and Generation-Skipping Transfer Tax Return) must be filed within 9 months of the date of death, with a possible 6-month extension. Even if no tax is owed, a return must be filed to elect portability of the unused exemption to a surviving spouse.
Strategy Can I reduce my estate by giving gifts?
Yes. The annual gift exclusion ($19,000 per recipient in 2025) lets you reduce your estate without using your lifetime exemption. Gifts above this amount use your lifetime exemption. Additionally, direct payments for medical care and tuition are excluded from gift tax entirely with no dollar limit.
Basics What happens to the estate tax exemption after 2025?
Without Congressional action, the TCJA sunset reverts the federal exemption to approximately $7M per individual (inflation-adjusted from the pre-2018 $5.49M baseline) after December 31, 2025. Estates between $7M and $13.99M that owe $0 today could face substantial federal estate tax under post-sunset rules.
Basics What is a SLAT and why is it popular now?
A Spousal Lifetime Access Trust (SLAT) lets one spouse make a large irrevocable gift to a trust that benefits the other spouse, using up the current high exemption before the TCJA sunset. The donor spouse technically can't access the assets, but the beneficiary spouse can — providing indirect access. These trusts must be carefully drafted to avoid the "reciprocal trust doctrine."
Basics How does the charitable deduction work for estates?
Bequests to qualifying charitable organizations are 100% deductible from the taxable estate — there is no cap. A $1 million bequest to charity reduces the taxable estate by $1 million, potentially saving up to $400,000 in federal estate tax. Charitable trusts (CRTs, CLTs) can be particularly effective, providing income during life while eventually transferring wealth to charity.
Advanced Are retirement accounts (IRA, 401k) included in the estate?
Yes. Traditional IRA and 401(k) balances are included in the gross estate at face value. Importantly, heirs also inherit the income tax liability on pre-tax retirement accounts — so the effective tax burden can be enormous (up to 40% estate tax + 37% income tax on the same dollars). Roth IRAs pass to heirs income-tax-free, making them highly estate-efficient.
Basics What is the 2-year rule for gifts before death?
For estate tax purposes, life insurance policies transferred within 3 years of death are "clawed back" into the estate. Gift taxes paid within 3 years of death are also added back. These "contemplation of death" rules prevent deathbed tax avoidance.
Basics How are business interests valued for estate tax?
Business interests must be valued at fair market value — the price a willing buyer would pay a willing seller. Family-owned businesses and limited partnerships may qualify for valuation discounts of 15–40% for lack of marketability and lack of control, significantly reducing the included value. IRS valuation rules are complex and frequently litigated.
Basics Do I need an estate attorney?
For estates approaching or exceeding the exemption threshold — especially with the TCJA sunset risk — yes. Estate tax planning requires coordination between attorneys, CPAs, and financial advisors. The stakes are high: proper planning can save families hundreds of thousands or even millions of dollars in taxes. This calculator provides estimates only and should not substitute for qualified legal and tax advice.