Estate Tax Calculator

Estate tax (also called inheritance tax or death duty depending on jurisdiction) is levied on the transfer of assets from a deceased person to their heirs. In the United States only estates above the federal exemption are taxed at all, and even then the tax applies only to the amount above the exemption rather than to the whole estate.

Federal estate tax formula: Taxable Estate = Gross Estate − Deductions − Exemption Estate Tax Owed = Taxable Estate × Applicable Tax Rate

Federal exemption per individual, indexed annually. A married couple can use both through the “portability” election, doubling whichever figure applies:

The 2026 jump comes from the 2025 tax law, which set the basic exclusion at $15 million and indexes it from there. Portability is not automatic: the surviving spouse’s estate has to file Form 706 for the first death to claim the unused half, and missing that filing is the most expensive paperwork error in estate planning.

Every dollar above the exemption is taxed at 40%, and that is the part worth understanding.

The statutory rate schedule does start at 18% and climb through a dozen brackets, but those brackets run from the first dollar of lifetime taxable transfers, not from the exemption. The exemption works as a credit against the tax on the first $15 million, which means the schedule is already exhausted long before your taxable estate begins. The schedule reaches its top 40% rate at just $1,000,000 of cumulative transfers.

So a calculator that restarts the 18% / 20% / 22% ladder at the exemption threshold will understate the tax substantially. On a $490,000 excess it produces about $152,400 where the correct answer is $196,000. The flat 40% is right for any estate large enough to owe federal estate tax at all.

Gross estate includes:

• All real estate (fair market value)
• Financial accounts, investments, retirement accounts
• Life insurance proceeds (if you own the policy)
• Business interests
• Personal property, vehicles, art, jewelry

Allowable deductions:

• Debts and mortgages
• Marital deduction, unlimited, for anything left to a surviving spouse
• Charitable deduction (unlimited)
• Funeral and administration expenses

State estate taxes: Twelve US states plus the District of Columbia levy their own estate tax, and their exemptions are far lower than the federal one. Oregon’s is $1,000,000, Massachusetts is $2,000,000, and several others sit in the low millions. A family that owes nothing federally can still face a state bill, which is why the state question is often the only one that matters.

Worked example: Gross estate: $15,000,000. Mortgage: $400,000. Charitable gift: $500,000. Died in 2024, so the exemption is $13,610,000.

• Deductions = $400,000 + $500,000 = $900,000
• Net estate = $15,000,000 − $900,000 = $14,100,000
• Taxable amount = $14,100,000 − $13,610,000 = $490,000
• Federal tax = $490,000 × 40% = $196,000

Under the exemption, the federal estate tax is $0. That covers roughly 99.9% of American estates, which is why this is a planning tool for a small number of families rather than a common tax.