Estate Tax Calculator
Estimate federal estate tax owed on a taxable estate after applying the federal exemption amount. Use this during estate planning or after a death to project the estate's tax liability before probate.
Last updated: September 2026
Formula below · 1 source (Wikipedia) · Updated Sep 2026
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About this calculator
The federal estate tax applies only to the portion of a taxable estate that exceeds the basic exclusion amount, which is $15 million per individual for deaths in 2026 (set by the One Big Beautiful Bill Act and indexed for inflation from 2027; it was $13.99 million in 2025). The formula is: Estate Tax = max((taxableEstate − exemptionAmount) × (taxRate / 100), 0). The max(..., 0) ensures no negative tax is returned when the estate falls below the exemption. Although the statutory rate schedule runs from 18% to 40%, the unified credit absorbs all the lower brackets for any estate above the exclusion, so the tax is effectively 40% of the excess. The taxable estate is the gross estate (real property, investments, business interests, retirement accounts and life insurance you owned) minus deductions such as debts, funeral and administration expenses, the marital deduction and charitable bequests; lifetime taxable gifts above the annual exclusion also use up the exemption. A married couple can shelter up to $30 million using portability.
How to use
Suppose a taxable estate is $20,000,000, the 2026 federal exemption is $15,000,000, and the rate is 40%. Step 1: Subtract the exemption — $20,000,000 − $15,000,000 = $5,000,000 above the exemption. Step 2: Apply the tax rate — $5,000,000 × 40% = $2,000,000. Step 3: Since the result is positive, max($2,000,000, 0) = $2,000,000. Enter taxableEstate = $20,000,000, exemptionAmount = $15,000,000, taxRate = 40. The calculator returns an estimated estate tax of $2,000,000.
Frequently asked questions
How does the federal estate tax exemption work and what is the current amount?
The federal exemption (basic exclusion amount) is a per-person threshold below which no federal estate tax is owed. For deaths in 2026 it is $15 million per individual, or $30 million for a married couple using portability; it was $13.99 million in 2025. The One Big Beautiful Bill Act made the $15 million level permanent and indexes it for inflation from 2027, so the reduction once scheduled for 2026 under the Tax Cuts and Jobs Act no longer applies. Any taxable estate above the exemption is taxed at an effective 40%. Some states impose their own estate or inheritance taxes at much lower thresholds.
What assets are included in the gross estate for federal estate tax purposes?
The gross estate includes virtually all assets owned or controlled by the decedent at death: real estate, bank and investment accounts, retirement accounts (IRAs, 401(k)s), business interests, vehicles, and personal property. Crucially, life insurance death benefits are included if the decedent owned the policy or had 'incidents of ownership.' Assets in a revocable living trust are also included because the decedent retained control. Gifts made within three years of death may be pulled back in under certain rules. Properly structured irrevocable trusts and beneficiary designations can move assets outside the gross estate.
How can I reduce federal estate tax through estate planning?
The most effective strategies reduce the gross estate or increase deductible amounts before the tax is calculated. Annual gifting (up to $19,000 per recipient in 2026) removes assets from the estate tax-free over time. Irrevocable life insurance trusts (ILITs) keep death benefits out of the gross estate. Charitable bequests and charitable remainder trusts generate an estate tax deduction equal to the donated amount. Grantor retained annuity trusts (GRATs) and family limited partnerships can transfer appreciating assets at discounted values. Because the laws and exemption amounts are complex and changing, working with an estate planning attorney is essential for high-net-worth families.
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