Estate Tax Calculator

How the federal estate tax is figured

The computation follows Form 706 in four steps. First, the gross estate: everything the deceased owned or controlled — real estate, investments, cash, vehicles, retirement accounts, business interests, and life insurance on policies they owned — valued at fair market value on the date of death (an executor may elect a date six months later if it lowers both the estate and the tax). Second, deductions: debts and mortgages, funeral and administration expenses, charitable bequests, and state death taxes actually paid all come off the top, as does anything left to a surviving spouse under the unlimited marital deduction. The result is the taxable estate. Third, lifetime taxable gifts are added back — gifts above the annual exclusion made since 1977 — because the gift and estate taxes share one unified system designed so you cannot dodge the tax by giving everything away the week before. Fourth, the unified credit: the tentative tax on that combined base, computed on the graduated rate schedule (18% rising to 40% above $1 million), is reduced by the credit — the tax on the exemption amount. For 2026 the exemption is $15,000,000, so the credit is $5,945,800 and, in practice, the tax equals 40% of whatever the base exceeds $15 million by.

The exemption, then and now

The exemption nearly tripled between 2017 and 2018 and was set at a flat $15 million from 2026 (indexed for inflation afterward), which is why this calculator leads with 2026 and keeps a 2025 column for comparison: dying a year earlier with the same estate could cost a family several hundred thousand dollars more, as the results above show. Married couples effectively get two exemptions — $30 million in 2026 — through portability, provided the first estate files the return that elects it.

Gifts: the annual exclusion and the unified credit

Each year you may give up to $19,000 per recipient (2025 and 2026) to as many people as you like, entirely outside the system — no tax, no return, no dent in the exemption. Gifts above that per person start consuming the lifetime exemption, and only when the exemption is exhausted does gift tax (also up to 40%) come due out of pocket. The "lifetime gifted" field in this calculator is the total of those exemption-consuming gifts: give away $2 million across your life and die in 2026, and your estate's remaining shelter is $13 million, not $15 million — the example the results above quietly encode. Direct payments of tuition and medical bills for someone else never count as gifts at all, nor do gifts to a spouse or to charity.

Ways a taxable estate gets smaller

• Annual-exclusion gifting — a couple with three married children can move $228,000 a year (6 recipients × $19,000 × 2 spouses) out of their estates, plus all future growth on it.
• Charitable bequests — deductible dollar for dollar, with no cap; many estates near the line give the taxable slice to charity rather than 40% of it to the IRS.
• An ILIT for life insurance — holding large policies in an irrevocable life insurance trust keeps the death benefit out of the gross estate entirely.
• Irrevocable trusts and valuation discounts — freezing techniques (GRATs, family entities, installment sales) shift future appreciation to heirs at today's values.
• Spending and state choice — the honest basics: enjoying the money, and dying domiciled in one of the majority of states with no state death tax at all (about a dozen states plus D.C. still levy an estate tax, and a few levy an inheritance tax on heirs).

One caution that outweighs all of the above: heirs generally receive assets with a stepped-up basis, erasing decades of capital gains at death. Aggressive lifetime gifting of appreciated assets trades a 40% estate tax the family might never owe for a capital-gains tax it certainly will — which is why estates below the exemption usually plan for income tax and probate, not estate tax, and why this estimate is a starting point for a conversation with an estate attorney, not the conversation itself.

Frequently asked questions

Who actually pays the federal estate tax?

Estates above $15 million per person in 2026 — well under 1 in 1,000 deaths. Only the excess over the exemption is taxed, at rates reaching 40%.

Is life insurance part of the taxable estate?

Yes, if you owned the policy — the full death benefit is in the gross estate (though income-tax free to the beneficiary). An ILIT is the standard fix.

What is portability?

The first spouse's unused exemption can pass to the survivor — up to $30 million sheltered per couple in 2026 — but only if Form 706 is filed for the first estate to elect it.

Estate tax vs. inheritance tax?

The estate pays the estate tax on the whole transfer; heirs pay an inheritance tax on what they receive. The federal government has only the former; a few states have the latter, and spouses are always exempt.