Estate Tax Calculator
Estimate federal estate tax owed after accounting for the lifetime exemption, marital and charitable deductions, and prior gift taxes paid. Used by estate planners and heirs evaluating large inheritances.
Last updated: September 2026
Formula below · 2 sources (IRS, Wikipedia) · Updated Sep 2026
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About this calculator
The federal estate tax applies to the taxable estate — the value remaining after subtracting allowable deductions and the lifetime exemption. The 2026 federal basic exclusion amount is $15,000,000 per individual (set by the One Big Beautiful Bill Act and indexed for inflation from 2027), meaning taxable estates below this threshold owe no federal estate tax. The taxable estate is calculated as: Taxable Estate = grossEstate − debts and expenses (mortgages and other debts, funeral costs, executor and legal fees) − maritalDeduction − charitableDeduction − remainingExemption, where remainingExemption = max(0, $15,000,000 − lifetimeExemptionAlreadyUsed). The 40% rate is then applied to the amount above the exemption (the graduated 18%–39% brackets apply only to the first $1 million, which the unified credit already covers, so every dollar above the exemption is taxed at 40%): Estate Tax = max(0, taxableEstate × 0.40 − giftTaxesPaid). Gift taxes paid during life on taxable gifts are credited against the estate tax owed to prevent double taxation. Proper estate planning with trusts, charitable giving, and gifting strategies can significantly reduce or eliminate this liability.
How to use
Assume a gross estate of $20,000,000, a marital deduction of $2,000,000, a charitable deduction of $500,000, no prior lifetime exemption used, and $0 in gift taxes paid. Remaining exemption = $15,000,000 − $0 = $15,000,000. Taxable estate = $20,000,000 − $2,000,000 − $500,000 − $15,000,000 = $2,500,000. Estate tax = max(0, $2,500,000 × 0.40 − $0) = $1,000,000. The estate would owe $1,000,000 in federal taxes, which must typically be paid within nine months of the decedent's death.
Frequently asked questions
What is the federal estate tax exemption and how does it work in 2026?
The federal estate tax exemption for 2026 is $15,000,000 per individual, meaning the first $15 million of a taxable estate passes to heirs free of federal estate tax. Married couples can effectively double this amount to $30 million through a portability election. Any portion of the exemption used for taxable lifetime gifts reduces the amount available at death. The One Big Beautiful Bill Act set this level permanently, removing the scheduled reversion to roughly $7 million after 2025, and indexes it for inflation starting in 2027, so later years' exemptions will be somewhat higher.
How does the marital deduction reduce estate taxes owed?
The unlimited marital deduction allows a U.S. citizen decedent to transfer any amount of assets to a surviving U.S. citizen spouse completely free of federal estate tax. This deduction effectively defers the tax until the surviving spouse's death. However, it does not eliminate the tax permanently — the surviving spouse's estate will be subject to estate tax on amounts exceeding the exemption at their death. Proper planning, such as using a Credit Shelter Trust (also called a bypass trust), can help both spouses maximize their individual exemptions.
Why are gift taxes paid during life credited against the estate tax?
The federal gift tax and estate tax are unified under a single transfer tax system to prevent people from avoiding estate tax by giving away assets before death. If you paid gift taxes on taxable gifts during your lifetime, those payments are credited against any estate tax owed at death, ensuring the same transferred wealth is not taxed twice. However, the lifetime exemption amounts used for taxable gifts reduce the exemption available to your estate. Coordinating lifetime gifting with estate planning is a key strategy for minimizing total transfer tax.