Estate Tax Calculator 2026
How the Federal Estate Tax Works in 2026
The federal estate tax is a tax on the transfer of property at death. For 2024, the IRS provides a generous exemption of $13.61 million per individual (rising to $13.99 million in 2025). Only estates valued above this threshold are subject to the tax. The tax rate on the amount exceeding the exemption is a flat 40%.
The calculator above helps you quickly estimate your potential federal estate tax liability. Enter your gross estate value (the total fair market value of everything you own at death), then subtract allowed deductions to arrive at the taxable estate.
Key Deductions That Reduce Your Taxable Estate
- Debts & Liabilities: Mortgages, personal loans, credit card balances, and other debts owed by the deceased.
- Administrative Expenses: Funeral costs, executor fees, attorney fees, and other costs to settle the estate.
- Charitable Deductions: Bequests to qualified charities are fully deductible.
- Marital Deduction: Assets left to a surviving spouse who is a U.S. citizen are generally exempt from estate tax, with no cap.
After these deductions, what remains is your taxable estate. If it's below $13.61 million, no federal estate tax is owed. Any amount above is taxed at 40%.
Important Considerations & Limitations
- Portability: A surviving spouse can use the deceased spouse’s unused exemption (DSUE), effectively doubling the threshold to $27.22 million for married couples. This requires filing Form 706.
- State Estate/Inheritance Taxes: Some states impose their own estate or inheritance taxes with lower exemptions (e.g., Massachusetts, Oregon). This tool only covers federal tax.
- Lifetime Gifts: The exemption is unified with gift tax, so large lifetime gifts above the annual exclusion ($18,000 per recipient in 2024) reduce the estate tax exemption.
- IRS Form 706: Estates over the exemption must file this return. Proper valuation and documentation are essential.
Estate Planning Strategies to Minimize Tax
Even if your estate exceeds the exemption, planning can reduce or eliminate the tax burden. Common strategies include:
- Making charitable bequests or setting up a charitable trust.
- Using irrevocable life insurance trusts (ILITs) to keep insurance proceeds out of the estate.
- Gifting assets during your lifetime to reduce the taxable estate.
- Creating a qualified personal residence trust (QPRT) or grantor retained annuity trust (GRAT).
- Taking advantage of the unlimited marital deduction and portability.
Disclaimer: This calculator and article are for informational and educational purposes only. It is not tax, legal, or financial advice. Laws change frequently and vary by state. Always consult a qualified estate planning attorney or CPA for advice regarding your specific situation.
