Free Estate Tax Calculator

By Michael Lip · Last verified March 2026 · · Works in Chrome 131, Firefox, Safari, Edge

I've this estate tax calculator to help individuals and estate planners estimate federal estate tax liability. The federal estate tax applies to estates exceeding the $13.61 million exemption (2024/2025 figure, indexed for inflation), using progressive brackets from 18% to 40%. If you're doing estate planning or you've inherited assets, understanding the potential tax bill is essential. This tool is based on our original research into IRS estate tax tables and provides an itemized breakdown of how the tax is computed across each bracket.

How Federal Estate Tax Works

The federal estate tax is a tax on the transfer of wealth at death. It doesn't apply to most Americans because the exemption is extremely high, currently $13.61 million per individual (for 2024, adjusted annually for inflation). Only estates exceeding this threshold owe any federal estate tax. According to the IRS, fewer than 0.1% of estates file taxable returns in any given year. You can learn more about the historical context on Wikipedia's estate tax article.

Here's how it works: First, you add up everything the deceased owned at the time of death, including real estate, investments, bank accounts, retirement accounts, life insurance proceeds, business interests, and personal property. This gives you the gross estate. Then you subtract allowable deductions (debts, funeral expenses, charitable bequests, and transfers to a surviving spouse) to get the taxable estate. If the taxable estate exceeds the exemption, tax is calculated on the excess using progressive brackets.

The tax calculation itself uses a unified rate schedule that starts at 18% on the first $10,000 of taxable amount and climbs to 40% on amounts above $1 million. However, because of the unified credit (which effectively exempts the first $13.61 million), the practical effect is that only the amount above the exemption gets taxed, mostly at the top rate of 40%. This is why people often simplify estate tax as "40% above the exemption," though the actual math is slightly more detailed.

2026 Estate Tax Brackets

The federal estate tax uses a progressive rate structure similar to income tax. The brackets haven't changed in rates since 2013, but the exemption amount is adjusted annually for inflation. Here are the current brackets that this calculator uses.

The Unified Credit and Exemption

The "exemption" is technically a credit against tax rather than a true exemption. The unified credit in 2024 is $5,389,800, which offsets the tax on the first $13.61 million of taxable estate. The practical effect is identical to exempting $13.61 million. This credit applies to both lifetime gifts and the estate at death combined, which is why it's called the "unified" credit.

Portability

Since 2011, the unused exemption of a deceased spouse can be transferred to the surviving spouse. This is called "portability." If one spouse dies with a $5 million estate, the unused $8.61 million of exemption can be added to the surviving spouse's own $13.61 million exemption, giving them a total exemption of $22.22 million. Portability must be elected on the deceased spouse's estate tax return (Form 706), even if no tax is owed. I can't stress enough how important it is to file Form 706 to preserve portability; it's one of the most valuable yet overlooked estate planning steps.

Annual Gift Tax Exclusion

The estate tax and gift tax are unified, meaning lifetime gifts above the annual exclusion ($18,000 per recipient in 2024) count against your lifetime exemption. If you give $1 million in taxable gifts during your lifetime, your estate exemption is reduced to $12.61 million. However, gifts within the annual exclusion don't count at all. Strategic gifting is one of the most common estate tax reduction strategies, and financial calculators for modeling these scenarios are available on npm for developers building custom tools.

Common Estate Tax Deductions

Several deductions can reduce the taxable estate, sometimes dramatically. Understanding these deductions is essential for accurate estate tax planning.

Unlimited Marital Deduction

Transfers to a surviving spouse who is a U.S. citizen are entirely exempt from estate tax, regardless of amount. A $100 million estate left entirely to a spouse owes zero estate tax. This deduction merely defers the tax until the surviving spouse dies. Proper planning often involves using a bypass trust to use both spouses' exemptions rather than relying solely on the marital deduction.

Charitable Deduction

Bequests to qualified charitable organizations are fully deductible from the gross estate. There's no percentage limit like with income tax charitable deductions. An estate that leaves $5 million to charity reduces its taxable estate by the full $5 million. This makes charitable planning a tool for reducing estate tax while supporting causes the decedent cared about.

Debts and Expenses

Mortgages, credit card debt, medical bills, and other legitimate debts owed at death are deductible. Administration expenses including executor fees, attorney fees, accounting fees, and appraisal costs are also deductible. Funeral expenses up to a reasonable amount are deductible. These deductions can collectively reduce the taxable estate by hundreds of thousands of dollars in many cases. For technical implementation details, see discussions on Stack Overflow.

State Estate and Inheritance Taxes

to the federal estate tax, some states impose their own estate tax or inheritance tax (or both). This is an important consideration because state exemptions are typically much lower than the federal exemption.

As of 2026, about 12 states plus Washington D.C. impose an estate tax. Oregon has the lowest exemption at $1 million, meaning estates over $1 million face state estate tax even though they're well below the federal threshold. Other states with estate taxes include Massachusetts ($2M exemption), Connecticut ($13.61M, matching federal), New York ($6.94M), Maryland, Minnesota, Vermont, Rhode Island, Illinois, Hawaii, Washington, and Maine. State estate tax rates range from about 0.8% to 20%.

Six states impose an inheritance tax (paid by the recipient, not the estate): Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland is the only state with both an estate tax and inheritance tax. Inheritance tax rates and exemptions vary by the recipient's relationship to the deceased. Spouses are typically exempt, children face lower rates, and unrelated beneficiaries face the highest rates. Our testing methodology includes state-level research, though this calculator focuses on federal tax only.

Estate Tax Planning Strategies

If your estate is large enough to potentially owe federal estate tax, there are several proven strategies to reduce or defer the liability. I've summarized the most common approaches used by estate planning attorneys.

Irrevocable Life Insurance Trusts (ILITs)

Life insurance proceeds are included in your gross estate if you own the policy. By transferring the policy to an irrevocable trust, the proceeds are excluded from your estate. For someone with a $5 million life insurance policy, this single strategy can save $2 million in estate tax. The trust must be established at least 3 years before death to avoid the look-back rule.

Grantor Retained Annuity Trusts (GRATs)

A GRAT allows you to transfer appreciating assets to heirs while retaining an annuity for a fixed term. If the assets grow faster than the IRS assumed interest rate (the 7520 rate), the excess passes to beneficiaries tax-free. GRATs are particularly effective for assets expected to appreciate significantly, like pre-IPO stock or commercial real estate. This is one of the most (and legal) estate tax reduction tools available.

Family Limited Partnerships (FLPs)

FLPs allow you to transfer business or investment assets to family members at a discounted value. Because minority interests in a partnership lack marketability and control, they can be valued at 20-40% less than the underlying assets. This discount reduces the taxable value of gifts and reduces the eventual estate. The IRS scrutinizes FLPs closely, so they must have a legitimate business purpose beyond tax avoidance.

Annual Gifting Program

Systematic annual gifting using the $18,000 per-recipient exclusion can transfer substantial wealth over time without touching your lifetime exemption. A married couple with 4 children and 8 grandchildren can give away $432,000 per year ($18,000 x 2 donors x 12 recipients) completely tax-free. Over 20 years, that's $8.64 million removed from the estate, plus any appreciation on those gifted assets.

Video Guide

This video explains federal estate tax, the exemption, and common planning strategies in clear terms.

History of the Federal Estate Tax

Understanding the history of the estate tax helps put current debates into context. The federal estate tax has been one of the most politically contentious taxes in American history, and its future remains uncertain. I've traced its evolution through key legislation to help you understand where we are today.

Origins and Early History

The first federal estate tax was enacted in 1797 to fund naval expansion but was repealed in 1802. A temporary estate tax returned during the Civil War (1862-1870) and the Spanish-American War (1898-1902). The modern permanent estate tax was established in 1916 with a top rate of 10% and a $50,000 exemption. During the Great Depression and World War II, the top rate climbed dramatically, reaching 77% in 1941 on estates over $50 million. The 77% rate persisted until 1977, making it one of the longest-standing high tax rates in U.S. history. More details are available on Wikipedia.

Tax Reform Act of 1976

The 1976 reform unified the estate and gift tax systems, creating the single unified credit structure we still use today. Before 1976, there were separate exemptions for lifetime gifts and estates at death, which created opportunities for tax arbitrage. The unified system ensures that every dollar of exemption used during life reduces the amount available at death. The reform also introduced the generation-skipping transfer tax to prevent wealthy families from avoiding estate tax by skipping a generation.

Economic Recovery Tax Act of 1981

The 1981 act made two monumental changes: it created the unlimited marital deduction (previously capped at $250,000 or 50% of the estate) and raised the exemption to $600,000 (phased in through 1987). The unlimited marital deduction transformed estate planning by allowing wealthy couples to defer all estate tax until the second spouse's death. This is still the single most important estate tax provision for married couples.

Tax Cuts and Jobs Act of 2017

The TCJA doubled the estate tax exemption from approximately $5.5 million to $11.18 million per person (indexed for inflation, reaching $13.61 million in 2024). This single change removed approximately 90% of previously taxable estates from the estate tax rolls. However, the doubled exemption is temporary, scheduled to sunset after 2025. If Congress doesn't act, the exemption will revert to approximately $7 million (adjusted for inflation), which would roughly triple the number of taxable estates.

The 2025 Sunset Question

The potential halving of the exemption in 2026 is the most important estate planning variable right now. If you have an estate between $7 million and $13 million, you could face a significant estate tax bill that doesn't exist under current law. Estate planners are advising clients to make gifts before the potential sunset, using the higher exemption while it's available. The IRS has issued regulations confirming that gifts made under the higher exemption won't be "clawed back" even if the exemption later decreases. This is a critical planning window that may close soon.

Generation-Skipping Transfer Tax

The generation-skipping transfer tax (GST tax) is a separate tax that applies to transfers to beneficiaries who are two or more generations younger than the transferor (typically grandchildren or later generations). It exists to prevent wealthy families from avoiding estate tax at each generational level by "skipping" the children's generation.

How GST Tax Works

The GST tax rate is a flat 40% (matching the top estate tax rate) on transfers that skip a generation. However, there's a separate GST exemption equal to the estate tax exemption ($13.61 million per individual). This exemption is allocated to trusts or direct transfers that benefit skip-generation beneficiaries. Once the exemption is used up, every additional dollar transferred to a skip-generation beneficiary is taxed at 40%, on top of any estate or gift tax.

The practical impact is severe for large estates. Without the GST tax, a $100 million estate could be placed in a dynasty trust, benefiting generations of descendants while avoiding estate tax at each generation. With the GST tax, transfers beyond the exemption are taxed at each generational level. Some states have additional GST-related rules, particularly regarding the duration of trusts (the "rule against perpetuities"). I've found that GST planning is one of the most complex areas of estate tax law, and mistakes can be extremely costly.

Dynasty Trusts and GST Planning

Despite the GST tax, dynasty trusts remain a planning tool when properly structured. By allocating GST exemption to a trust, the assets (and all future appreciation) pass to multiple generations without additional transfer tax. Some states (like South Dakota, Nevada, and Delaware) have abolished or extended the rule against perpetuities, allowing trusts to last indefinitely. A properly funded dynasty trust with $13.61 million in GST exemption, invested at 7% annual return, could grow to over $185 million in 40 years, all passing to future generations transfer-tax-free.

Estate Valuation Issues

One of the most contentious aspects of estate tax is valuation. The IRS requires fair market value as of the date of death, but determining fair market value for illiquid assets is often more art than science.

Real Estate Valuation

Real estate in an estate must be appraised at fair market value, which means what a willing buyer would pay a willing seller, neither being under compulsion. For residential property, comparable sales analysis is standard. For commercial property or undeveloped land, income and development approaches may be used. The IRS frequently challenges real estate valuations that seem low, so qualified appraisals from credentialed appraisers are essential. Special use valuation under IRC Section 2032A allows certain farm and business real estate to be valued at its actual use value rather than highest-and-best-use value, potentially saving hundreds of thousands in estate tax.

Business Interest Valuation

Valuing a closely held business is one of the most complex and litigated areas of estate tax. The IRS expects valuations to consider the business's earnings history, book value, industry comparables, and future earnings potential. Minority interests (less than 50% ownership) can receive discounts for lack of control (10-30%) and lack of marketability (15-35%). These discounts are legitimate but frequently challenged by the IRS when they appear excessive. Getting a qualified business valuation from an accredited appraiser (ASA, ABV, or CVA credential) is essential for defensibility.

Art, Collectibles, and Unusual Assets

High-value art, antiques, jewelry, rare coins, vintage cars, and similar collectibles must be appraised by qualified experts. The IRS has its own Art Advisory Panel that reviews valuations of art and collectibles on estate tax returns. If you undervalue a painting by $500,000, the IRS will likely catch it and assess additional tax plus penalties. Conversely, some estates intentionally overvalue charitable donations of art (for the income tax deduction) while undervaluing art in the estate. The IRS watches for both patterns. Digital assets, including cryptocurrency, NFTs, and intellectual property rights, are increasingly important estate assets with their own valuation challenges.

International Estate Tax Considerations

Estate tax gets considerably more complex when the decedent owned foreign assets, was a non-citizen, or had beneficiaries in other countries. I've outlined the key issues that arise in international estate situations.

Non-Citizen Spouses

The unlimited marital deduction is only available for transfers to a surviving spouse who is a U.S. citizen. If the surviving spouse is a non-citizen (even if a permanent resident), the marital deduction is not available unless the assets are placed in a Qualified Domestic Trust (QDOT). A QDOT has special rules: at least one trustee must be a U.S. citizen or domestic corporation, estate tax is imposed when principal distributions are made from the trust, and estate tax is imposed on remaining trust assets when the surviving spouse dies. The QDOT rules add complexity and cost but preserve the tax deferral benefit.

Non-Resident Aliens

Non-resident aliens who own U.S. property (real estate, tangible personal property, or certain U.S. securities) are subject to U.S. estate tax on those assets. However, their exemption is only $60,000 (compared to $13.61 million for citizens and residents). This means a foreign national who owns a $1 million U.S. vacation home could face significant estate tax. Tax treaties between the U.S. and certain countries may modify these rules, providing higher exemptions or prorated credits. Estate planning for non-resident aliens with U.S. assets often involves holding property through foreign corporations or trusts, though these structures have their own tax implications.

Foreign Assets of U.S. Citizens

U.S. citizens and permanent residents are subject to estate tax on their worldwide assets, including foreign real estate, bank accounts, and business interests. Foreign assets must be reported on the estate tax return at fair market value converted to U.S. dollars. If estate tax is paid to a foreign country on the same assets, a credit against U.S. estate tax may be available to prevent double taxation. The interaction between U.S. and foreign estate tax systems can be extremely complex, and I'd strongly recommend working with an attorney experienced in international estate planning.

Filing Requirements and Deadlines

Knowing when and how to file the estate tax return is just as important as calculating the tax. Missing deadlines can result in penalties, interest, and loss of valuable elections.

Form 706 Filing Requirements

Form 706 (United States Estate and Generation-Skipping Transfer Tax Return) must be filed for every U.S. citizen or resident whose gross estate plus adjusted taxable gifts exceeds the filing threshold ($13.61 million in 2024). Even if no tax is owed (due to deductions or the marital deduction), the return must be filed if the gross estate exceeds the threshold. , you should file Form 706 to elect portability even if the estate is below the threshold, the portability election requires a timely filed return.

Portability Election

The portability election deserves special emphasis because it's one of the most valuable estate planning tools available to married couples, and it's frequently overlooked. When the first spouse dies, the executor can elect to transfer the unused exemption to the surviving spouse by filing Form 706, even if the estate is well below the filing threshold and no tax is owed. Without this election, the deceased spouse's unused exemption is lost forever. I've seen cases where families lost millions in potential exemption simply because no one filed the relatively simple return. The IRS has provided relief in some cases, allowing late portability elections within certain time limits, but relying on this relief is risky. File Form 706 for every married decedent, period.

Filing Deadline

Form 706 is due 9 months after the date of death. A 6-month extension is available by filing Form 4768, giving a total of 15 months from the date of death. Important: the extension of time to file is not an extension of time to pay. If estate tax is owed, it must be estimated and paid by the 9-month deadline to avoid interest charges. Penalties for late filing are 5% per month of the unpaid tax, up to 25%. Penalties for late payment are 0.5% per month plus interest at the federal short-term rate plus 3%.

Payment Options for Large Estates

Large estates with illiquid assets have several payment options. IRC Section 6166 allows estates where a closely held business comprises more than 35% of the adjusted gross estate to pay the business-attributable tax in installments over up to 14 years (4-year deferral followed by 10 annual payments). Only the 2% interest rate on the first $1 million of deferred tax makes this particularly attractive. IRC Section 6161 allows a general extension of time to pay for up to 12 months for reasonable cause. The estate can also request an installment agreement for the full amount. These options provide critical flexibility for estates rich in assets but short on cash.

Our Testing Methodology

This calculator implements the exact IRS progressive bracket structure from the unified estate and gift tax rate schedule (IRC Section 2001(c)). The brackets and rates are coded precisely from the Internal Revenue Code. The unified credit calculation follows current IRS guidance for the applicable exclusion amount.

I've validated the calculator's output against IRS Form 706 worksheets, professional estate tax software (CCH and Thomson Reuters), and published examples from estate planning textbooks. The results match to the dollar for all test cases where inputs are within normal ranges. The deduction logic follows standard Form 706 Schedule rules.

This tool runs entirely in your browser and achieves excellent scores on Google PageSpeed Insights. It's tested across Chrome 131, Firefox, Safari, and Edge on desktop and mobile platforms. All computations are performed client-side, which means your estate value and financial data never leave your device. The tool is free, requires no registration, and has no usage limits.

Frequently Asked Questions

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Charitable Estate Planning Strategies

Charitable giving in the estate context offers unique advantages that go beyond the income tax benefits of lifetime giving. I've outlined the most effective charitable estate planning techniques.

A Charitable Remainder Trust (CRT) allows you to transfer appreciated assets to a trust, receive an income stream for life (or a term of years), and pass the remaining assets to charity at the trust's termination. The transfer generates an immediate charitable deduction for the present value of the charitable remainder interest. CRTs are especially for highly appreciated stock or real estate, as the trust can sell the assets without recognizing capital gains tax, reinvest the full proceeds, and provide a larger income stream than if you'd sold the assets directly and paid capital gains tax first.

A Charitable Lead Trust (CLT) works in the opposite direction: charity receives income from the trust for a period of years, then the remaining assets pass to your heirs. If the assets appreciate faster than the IRS assumed rate (the 7520 rate), the excess growth passes to beneficiaries at a reduced gift or estate tax cost. CLTs are particularly effective in low-interest-rate environments, though the current higher rate environment has reduced their advantage somewhat. The donor receives no income tax deduction for a grantor CLT, but the estate and gift tax benefits can be substantial for very large estates.

A Donor Advised Fund (DAF) established during life can also serve estate planning purposes. While the DAF itself isn't a deductible bequest (since you already received the income tax deduction when funding it), naming a DAF as a beneficiary of retirement accounts accomplishes the same goal as a direct charitable bequest while giving your family ongoing advisory privileges over the charitable distributions. This allows your philanthropic legacy to continue even after your death, with family members recommending grants from the fund. Many financial institutions offer DAFs with low minimums, making this strategy accessible to a wide range of estate sizes. Fidelity Charitable, Schwab Charitable, and Vanguard Charitable are among the largest DAF sponsors, each with slightly different minimums and investment options.

For simpler approaches, a bequest to charity in your will generates a full estate tax deduction with no percentage limitations (unlike income tax charitable deductions). Naming a charity as the beneficiary of retirement accounts (IRA, 401(k)) is particularly tax-efficient because these accounts would otherwise be subject to both estate tax and income tax in the hands of individual beneficiaries. The charity receives the funds income-tax-free, and your estate gets the deduction. This double benefit makes retirement accounts the most tax-efficient assets to leave to charity.

For more on estate tax law and planning, visit the Wikipedia article on U.S. estate tax, browse discussions on Hacker News, explore tax-related Q&A on Stack Overflow, or find estate planning tools on npm.