Calculate Federal Estate Tax with Accuracy
Use our comprehensive estate tax calculator to estimate your federal estate tax liability based on current IRS regulations for 2026. This tool helps you understand the potential tax implications of your estate, including the impact of the federal estate tax exemption, deductions, and progressive tax rates. Whether you're engaged in estate planning, wealth management, or preparing for estate administration, our calculator provides accurate estimates to help you make informed decisions.
The federal estate tax applies to the transfer of property at death when the total value exceeds the exemption threshold. Understanding your potential estate tax burden is essential for effective estate planning, trust administration, and implementing tax-minimization strategies such as lifetime gifting, charitable giving, and the use of trusts.
Accurate Calculations
Based on 2026 IRS estate tax rates and the current $13.99 million federal exemption amount, with support for all deductions and credits.
Comprehensive Planning
Factor in marital deductions, charitable bequests, lifetime gifts, debts, and administrative expenses for complete estate tax planning.
Tax Optimization
Discover strategies to minimize estate taxes through proper planning, including gifting strategies, trust structures, and exemption utilization.
Calculate Your Estate Tax
Based on 2026 IRS rates and exemptions
Include all property, investments, and assets
What is Estate Tax?
The federal estate tax, sometimes called the "death tax," is a tax on your right to transfer property at your death. The Internal Revenue Service (IRS) calculates estate tax based on the fair market value of all assets in your estate at the time of death, including real estate, investments, business interests, and personal property.
2026 Estate Tax Exemption
For 2026, the federal estate tax exemption is $13.99 million per individual ($27.98 million for married couples). This means estates valued below this threshold are not subject to federal estate tax. The exemption amount is adjusted annually for inflation.
Estate Tax Rates
Federal estate tax rates are progressive, ranging from 18% to 40%. The top rate of 40% applies to taxable estates exceeding $1 million above the exemption amount. Understanding these brackets is crucial for effective estate planning and wealth transfer strategies.
Portability of Exemption
Married couples can take advantage of "portability," which allows the surviving spouse to use any unused portion of the deceased spouse's estate tax exemption. This effectively doubles the exemption for married couples, providing significant tax savings for families engaged in estate planning.
Estate Planning Strategies
Proper estate planning can help minimize estate taxes and ensure your assets are distributed according to your wishes. Here are key strategies to consider:
Lifetime Gifting
Make annual gifts up to the exclusion amount ($19,000 per recipient in 2026) to reduce your taxable estate while potentially helping beneficiaries during your lifetime.
Irrevocable Trusts
Transfer assets into irrevocable trusts to remove them from your taxable estate while maintaining control over how and when beneficiaries receive distributions.
Charitable Giving
Charitable donations reduce your taxable estate dollar-for-dollar while supporting causes you care about and potentially providing income tax deductions.
Life Insurance Trusts
Place life insurance policies in an irrevocable life insurance trust (ILIT) to keep proceeds out of your taxable estate while providing liquidity for heirs.
Family Limited Partnerships
Create family limited partnerships (FLPs) to transfer business interests at discounted values, reducing estate tax liability while maintaining management control.
Marital Deduction
Transfer unlimited assets to your surviving spouse tax-free through the unlimited marital deduction, deferring estate taxes until the second spouse's death.
Frequently Asked Questions
How is estate tax different from inheritance tax?
Estate tax is levied on the estate itself before distribution to heirs, while inheritance tax is paid by beneficiaries who receive the assets. The federal government only imposes estate tax, not inheritance tax. However, some states impose their own estate or inheritance taxes with different exemption thresholds and rates.
What assets are included in the gross estate?
Your gross estate includes all property you own at death: real estate, bank accounts, stocks and bonds, business interests, retirement accounts, life insurance proceeds (if you own the policy), personal property, and any other assets. The fair market value on the date of death determines the taxable value.
When is estate tax return (Form 706) due?
IRS Form 706 (United States Estate Tax Return) must be filed within nine months of the date of death if the gross estate exceeds the filing threshold. Executors can request a six-month extension. Payment of any estate tax due is required with the return filing.
Can estate tax be paid in installments?
Under certain circumstances, estate tax can be paid in installments over 14 years if a closely-held business comprises more than 35% of the adjusted gross estate. This provision helps prevent forced liquidation of family businesses to pay estate taxes.
What deductions reduce the taxable estate?
Allowable deductions include funeral expenses, debts owed at death, mortgages and liens, administrative costs (attorney and executor fees), casualty losses, charitable bequests, and the unlimited marital deduction for property passing to a surviving spouse. These deductions significantly reduce the taxable estate value.
Do state estate taxes apply?
Several states impose their own estate taxes with exemption amounts often lower than the federal exemption. States with estate taxes include Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia. Check your state's specific requirements.
Official Government Resources
Access authoritative information from official government sources:
IRS Estate Tax Information
Official IRS guidance on estate taxes, forms, and filing requirements
Form 706: Estate Tax Return
Download and instructions for the United States Estate Tax Return
USA.gov Estate Planning Guide
Comprehensive federal guidance on estate planning and related topics
Important: This calculator provides estimates based on current federal estate tax laws. Estate planning is complex and tax laws change. Always consult with a qualified estate planning attorney and tax professional for personalized advice regarding your specific situation.
Estate Tax vs Gift Tax vs Inheritance Tax: Key Differences
| Feature | Estate Tax | Gift Tax | Inheritance Tax |
|---|---|---|---|
| Who Pays | Estate/Executor | Gift Giver | Beneficiary/Heir |
| When Applied | After death | During lifetime | After receiving inheritance |
| Federal Exemption (2026) | $13.99 million | $13.99 million (lifetime) | No federal tax |
| Tax Rate Range | 18% - 40% | 18% - 40% | Varies by state (0% - 18%) |
| Annual Exclusion | N/A | $19,000 per recipient | N/A |
| Federal or State | Both (13 states + DC) | Federal only | State only (6 states) |
| Marital Deduction | Unlimited | Unlimited | Usually exempt |
| Charitable Deduction | Unlimited | Unlimited | Varies by state |
Key Insight: Estate tax and gift tax share a unified exemption amount. Any portion of the lifetime gift tax exemption you use during your life reduces the estate tax exemption available at death. This unified credit system requires coordinated planning between lifetime gifting and estate planning strategies.
Federal vs State Estate Tax: 2026 Comparison
Federal Estate Tax
Exemption: $13.99 million
Per individual in 2026
Rate: 18% - 40%
Progressive rate structure
Portability Available
Spouse can use unused exemption
Nationwide Application
Applies to all U.S. residents
State Estate Taxes
Exemption: $1M - $13.99M
Varies significantly by state
Rate: 0.8% - 20%
Different rates per state
Limited Portability
Most states don't allow portability
13 States + DC
Only certain jurisdictions impose tax
State Estate Tax Exemptions (2026)
Important: If you live in or own property in a state with estate tax, you may owe state estate tax even if your estate is below the federal exemption threshold. Some states have exemptions as low as $1 million, making state estate tax planning critical for many families.
Federal Estate Tax Exemption History (2010-2026)
| Tax Year | Exemption Amount | Top Tax Rate | Key Changes |
|---|---|---|---|
| 2010 | $5.00 million | 35% | Tax reinstated after 2009 repeal |
| 2013 | $5.25 million | 40% | Permanent legislation enacted |
| 2017 | $5.49 million | 40% | Inflation adjustment |
| 2018 | $11.18 million | 40% | TCJA doubled exemption |
| 2020 | $11.58 million | 40% | Inflation adjustment |
| 2022 | $12.06 million | 40% | Inflation adjustment |
| 2024 | $13.61 million | 40% | Significant inflation adjustment |
| 2026 | $13.99 million | 40% | Current year |
Important: 2026 Sunset Provision
The current high exemption amounts established by the Tax Cuts and Jobs Act (TCJA) are scheduled to sunset on December 31, 2025. Beginning January 1, 2026, the exemption may revert to pre-2018 levels (approximately $7 million adjusted for inflation) unless Congress acts to extend the current rates. This creates significant planning urgency for high-net-worth individuals to utilize the current exemption amounts while available.
When Should You Use an Estate Tax Calculator?
Use the Calculator When:
- Your estate value exceeds $10 million and you need to estimate potential tax liability
- You're developing an estate plan and want to understand tax implications
- You're comparing different estate planning strategies and their tax outcomes
- You've received an inheritance and need to understand estate settlement costs
- You're preparing to file IRS Form 706 and want to verify calculations
- You're evaluating whether lifetime gifting or testamentary transfer is more tax-efficient
Consult a Professional When:
- Your estate includes complex assets like business interests or foreign property
- You need to establish trusts or implement advanced estate planning techniques
- You have concerns about generation-skipping transfer tax (GSTT)
- You're subject to both federal and state estate taxes requiring coordination
- You need to prepare and file actual tax returns (Form 706 or state equivalents)
- Your situation involves multiple marriages, blended families, or special needs beneficiaries
Remember: Estate tax calculators provide valuable estimates for planning purposes, but they cannot replace professional advice. Work with qualified estate planning attorneys, CPAs, and financial advisors to develop a comprehensive estate plan tailored to your specific situation and goals.
IRS Form 706: Estate Tax Return Filing Requirements
Understanding when and how to file Form 706 is crucial for estate administration. The United States Estate (and Generation-Skipping Transfer) Tax Return must be filed by executors and administrators for estates meeting specific thresholds.
Filing Threshold (2026)
Gross Estate Value: Greater than $13.99 million
Or if the deceased person made lifetime gifts exceeding the exclusion amount
Or if electing portability of the deceased spouse's unused exemption (DSUE)
Filing Deadline
Due Date: 9 months after date of death
Extension Available: Additional 6-month extension possible
Payment Due: Tax payment due with original return filing
What to Include in Form 706
- • Complete inventory of all estate assets with fair market values
- • Real estate holdings and property valuations
- • Financial accounts, stocks, bonds, and investment portfolios
- • Business interests and partnership stakes
- • Life insurance proceeds (if applicable)
- • Retirement accounts (IRAs, 401(k)s, pensions)
- • Personal property and household goods
- • Outstanding debts and liabilities
- • Funeral and administrative expenses
- • Charitable bequests and marital deductions
Pro Tip: Even if no estate tax is due, filing Form 706 can be beneficial to elect portability of the deceased spouse's unused exemption (DSUE amount), which allows the surviving spouse to use any remaining exemption. This election must be made within the filing deadline.
Estate Tax Planning Timeline: When to Take Action
Effective estate planning requires proactive steps at different life stages. Here's a comprehensive timeline for estate tax planning activities.
Ages 18-40: Foundation Building
- • Create basic will and designate beneficiaries for all accounts
- • Establish power of attorney and healthcare directives
- • Begin annual gifting strategy using annual exclusion ($19,000 per recipient)
- • Purchase adequate life insurance to protect dependents
- • Start building retirement accounts and investment portfolios
Ages 40-60: Accumulation Phase
- • Review and update estate plan every 3-5 years
- • Calculate estimated estate value and potential tax exposure
- • Consider establishing revocable living trust for probate avoidance
- • Implement lifetime gifting program to reduce taxable estate
- • Evaluate business succession planning if applicable
- • Consider charitable giving strategies (CRTs, CLTs, donor-advised funds)
Ages 60+: Distribution Planning
- • Conduct comprehensive estate tax calculation annually
- • Maximize lifetime gift tax exemption before sunset (if applicable)
- • Establish irrevocable trusts (ILITs, GRATs, QPRTs) as appropriate
- • Review beneficiary designations on all retirement and financial accounts
- • Consider Roth conversions to reduce taxable estate
- • Coordinate federal and state estate tax planning strategies
- • Update will and trust documents to reflect current wishes
Ages 75+: Legacy Optimization
- • Complete all major lifetime transfers before health decline
- • Ensure all documentation and valuations are current
- • Provide executor with comprehensive asset inventory and instructions
- • Consider qualified charitable distributions from IRAs
- • Review and optimize basis step-up planning strategies
- • Ensure portability election will be made if first spouse to die
10 Common Estate Tax Planning Mistakes to Avoid
Even with the best intentions, estate planning errors can result in unnecessary tax liability and complications for your heirs. Here are the most common mistakes and how to avoid them.
1Failing to Plan for Estate Tax
Assuming your estate is too small or that heirs will figure it out. Solution: Calculate your estate value now and create a plan, especially with exemption sunset approaching.
2Not Using Annual Gift Exclusion
Missing opportunities to reduce taxable estate through $19,000 per person annual gifts. Solution: Implement systematic gifting program to children, grandchildren, and others.
3Improper Beneficiary Designations
Outdated or missing beneficiary forms on retirement accounts and life insurance. Solution: Review and update all beneficiary designations every 2-3 years and after major life events.
4Owning Life Insurance Directly
Life insurance proceeds included in taxable estate because you own the policy. Solution: Transfer policies to an irrevocable life insurance trust (ILIT) to keep proceeds out of estate.
5Ignoring State Estate Taxes
Focusing only on federal exemption while overlooking lower state thresholds. Solution: Calculate both federal and state estate tax exposure if you live in one of the 13 states with estate tax.
6Not Electing Portability
Failing to file Form 706 to preserve deceased spouse's unused exemption (DSUE). Solution: File Form 706 timely even if no tax is due to preserve portability for surviving spouse.
7Waiting Too Long to Transfer Assets
Delaying gifts until health declines or death is imminent. Solution: Make transfers while healthy to ensure validity and avoid potential challenges to mental capacity.
8Inadequate Record Keeping
Poor documentation of gifts, asset valuations, and basis information. Solution: Maintain detailed records of all transfers, valuations, and tax returns for statute of limitations period.
9Forgetting About Appreciated Assets
Gifting appreciated property when better to retain for step-up in basis at death. Solution: Coordinate income tax planning with estate tax planning for optimal results.
10DIY Complex Planning
Using online forms for sophisticated estate plans without professional review. Solution: Work with qualified estate planning attorney and CPA for estates approaching exemption threshold.
Step-by-Step: How the IRS Calculates Estate Tax
Understanding the precise calculation methodology helps you plan more effectively and identify optimization opportunities.
- 1
Calculate Gross Estate
Sum the fair market value of all property owned at death: real estate, financial accounts, investments, business interests, personal property, life insurance proceeds, retirement accounts, and any other assets. Include jointly owned property and assets in trust where you retained certain powers.
- 2
Subtract Allowable Deductions
Deduct funeral expenses, estate administration costs (attorney fees, executor fees, court costs), outstanding debts and mortgages, casualty losses, unlimited marital deduction for qualifying transfers to surviving spouse, and unlimited charitable deduction for bequests to qualified organizations.
- 3
Add Adjusted Taxable Gifts
Add back the value of all lifetime taxable gifts made after December 31, 1976, that exceeded the annual exclusion amount. This prevents the use of lifetime transfers to avoid estate tax while preserving the unified credit system.
- 4
Calculate Tentative Tax
Apply the progressive estate tax rates (18% to 40%) to the tentative tax base calculated in step 3. The rate schedule is graduated, with higher rates applying to larger estate values above specific thresholds.
- 5
Apply Unified Credit
Subtract the unified credit amount (equivalent to tax on $13.99 million in 2026). This credit effectively exempts estates below the threshold from taxation. Also subtract any gift taxes previously paid on post-1976 gifts and any applicable credit for prior transfers.
- 6
Determine Estate Tax Due
The result is the net federal estate tax liability. If the calculation yields a negative number, no estate tax is due. This amount must be paid within 9 months of the date of death, though installment payments may be available for estates with closely-held business interests.
Example Calculation: Gross estate of $20 million - $2 million in deductions + $1 million adjusted taxable gifts = $19 million tentative base. After applying the unified credit for the $13.99 million exemption, the taxable amount is $5.01 million, resulting in approximately $2 million in federal estate tax (40% rate on amount over exemption).
Understanding Estate Tax Calculations
The estate tax calculation process begins with determining the gross estate value, which includes all assets owned at the time of death. This encompasses real property, financial accounts, investment portfolios, business interests, retirement plans, life insurance proceeds, and personal property. The executor or personal representative must value these assets at fair market value as of the date of death or the alternate valuation date if elected.
From the gross estate, allowable deductions are subtracted to arrive at the taxable estate. These deductions include funeral expenses, estate administration costs, outstanding debts and mortgages, casualty losses, the unlimited marital deduction for qualifying transfers to a surviving spouse, and charitable deductions for bequests to qualified organizations. Proper documentation of these deductions is essential for IRS compliance.
Adjusted taxable gifts made during lifetime (gifts exceeding the annual exclusion amount) are added back to calculate the tentative tax base. The estate tax is computed using progressive rates ranging from 18% to 40%, with the highest rate applying to amounts over $1 million above the exemption. The unified credit, which corresponds to the exemption amount, is then applied to reduce or eliminate the tax liability for most estates.
For estates that exceed the exemption threshold, careful planning is crucial. Strategies such as establishing irrevocable life insurance trusts (ILITs), grantor retained annuity trusts (GRATs), qualified personal residence trusts (QPRTs), and family limited partnerships can significantly reduce estate tax exposure. Additionally, making full use of the annual gift tax exclusion ($19,000 per recipient in 2026) and the lifetime gift tax exemption can transfer wealth tax-efficiently during your lifetime.
It's important to note that while this calculator provides estimates based on federal law, individual states may impose their own estate or inheritance taxes with different exemption amounts and rates. Some states have estate tax exemptions as low as $1 million, creating potential tax liability even when no federal estate tax is due. Coordinating federal and state estate tax planning requires expertise from qualified professionals familiar with both jurisdictions.
Related Estate Planning Topics
Gift Tax Planning
Understand how lifetime gifts affect your estate tax calculation and learn about annual exclusions, lifetime exemptions, and generation-skipping transfer tax implications.
Trust Administration
Explore how revocable and irrevocable trusts impact estate taxation, including credit shelter trusts, bypass trusts, and qualified terminable interest property (QTIP) trusts.
Business Succession Planning
Special considerations for business owners, including valuation discounts, buy-sell agreements, and strategies to transfer business interests tax-efficiently.
Charitable Estate Planning
Maximize tax benefits through charitable remainder trusts, charitable lead trusts, private foundations, and donor-advised funds as part of your legacy planning.