Estate Tax Calculator (US Federal)

How the Federal Estate Tax Works

The federal estate tax applies only to the portion of a gross estate that exceeds the federal exemption amount for the decedent's filing status. Most estates fall entirely below this exemption and owe no federal estate tax at all — it was designed to apply to a small share of very large estates, not to the typical household.

The Taxable Estate Formula

$$\text{Taxable Estate} = \text{Gross Estate} - \text{Exemption}$$

If the result is zero or negative, no federal estate tax is owed. Otherwise, the taxable estate amount is taxed cumulatively across a series of brackets — each slice of the taxable estate is taxed at that bracket's own rate, then the results are added together, the same progressive structure used for income tax brackets.

Worked Example: 20-Million-Dollar Estate, Single

For a 20,000,000-dollar gross estate filing as single, the current federal exemption of 15,000,000 dollars leaves a taxable estate of 5,000,000 dollars. Walking that amount through the bracket table produces a federal estate tax of approximately 1,945,799.78 dollars, an effective rate of about 38.9 percent — noticeably below the 40 percent top marginal rate, because the lower brackets are still taxed at their own lower rates first.

Why the Exemption Is So High — and Why That Doesn't Mean No Tax Planning Matters

The federal exemption is large enough that federal estate tax realistically only affects a small share of very wealthy estates. That doesn't make state-level taxes irrelevant: several states impose their own separate estate or inheritance tax with a far lower exemption, so a family well below the federal threshold can still owe a real state tax bill. See the callout above the bracket table on this page for the current dataset's note on this.

The Unified Gift and Estate Tax Exemption

Federal law treats large lifetime gifts and the estate left at death as drawing from the same lifetime exemption pool, not two separate allowances. Each year, an individual can give a limited amount to any one recipient completely free of gift tax under the separate annual gift exclusion, which doesn't touch the lifetime exemption at all. Gifts above that annual amount, however, reduce the very same lifetime exemption this calculator applies at death — someone who uses a meaningful share of their exemption through lifetime gifts above the annual exclusion has that much less exemption remaining to shelter their estate later. This is why lifetime gifting is a real, commonly used estate-planning strategy: it can move future appreciation on a gifted asset out of the taxable estate entirely, but it draws down the same unified exemption rather than creating an entirely separate tax-free allowance. This calculator only applies the exemption at death and does not track any prior taxable gifts — a full accounting of lifetime gifts already made is one of the specific gaps named in the disclaimer above, and is exactly the kind of interaction a qualified estate attorney accounts for in real planning.

Common Estate Tax Mistakes

Assuming an estate below the federal exemption owes no tax at all anywhere is the most common and most costly mistake — state estate and inheritance taxes are calculated completely separately, with their own (often much lower) exemption amounts. Confusing the federal exemption with a state exemption, and forgetting that married couples can generally combine both spouses' exemptions through portability, are two more frequent sources of confusion when planning ahead.

Estate Tax Terms You Should Know

Gross Estate — the total fair market value of everything owned at death: real estate, investments, retirement accounts, business interests, and more, before any deductions.

Federal Exemption — the dollar amount of an estate that passes free of federal estate tax, adjusted for inflation annually and set separately for single filers and married couples.

Portability — an election that lets a surviving spouse use any unused portion of their late spouse's federal exemption, effectively combining both exemptions.

Marginal vs. Effective Rate — the marginal rate is what applies to the last dollar of the taxable estate; the effective rate is total estate tax divided by the full taxable estate, which is always lower.

Inheritance Tax — a separate, state-level tax charged to the person receiving an inheritance rather than to the estate itself; only a handful of states levy one, and it is not covered by this calculator.

This calculator estimates federal estate tax only, based on a simplified bracket walk against the exemption for the selected filing status. It does not account for portability elections actually filed, prior taxable gifts, marital or charitable deductions, valuation discounts, or state-level estate and inheritance taxes. This is a planning estimate for educational purposes — verify current exemption and bracket figures at irs.gov, and consult a qualified estate attorney or tax professional before making real estate planning decisions.