Estimate federal estate tax on an inheritance with 2026 exemption amounts.
How to Use the Estate Tax Calculator
The federal estate tax is one of the most misunderstood taxes in the United States. Often called the “death tax” in political debates, it actually applies to only a tiny fraction of estates, those large enough to exceed a multi-million-dollar exemption. But if your estate is anywhere near that threshold, or if you are planning for the future growth of your assets, understanding your potential exposure is essential. That is where an estate tax calculator comes in.
This tool estimates the federal estate tax that could be owed on an estate. You enter the total value of the estate, subtract allowable deductions such as debts, funeral expenses, and charitable bequests, and the calculator applies the current exemption amount and tax rates to estimate what, if anything, would be owed. It is designed for quick “what if” planning: how does the tax change if the estate grows, if you make large charitable gifts, or if exemption amounts change with new legislation?
Note what this calculator is and is not: it estimates federal estate tax only, using simplified rate math suitable for planning but not for filing a return. Many states impose their own taxes with much lower thresholds. Think of it as a compass, not a GPS, and confirm decisions with an estate planning attorney.
Step-by-Step Instructions
- Enter the gross estate value. Add up everything the person owns or has certain interests in: real estate, bank and investment accounts, retirement accounts, business interests, and life insurance owned by the deceased. Use fair market values, not purchase prices.
- Enter deductible debts and expenses. Include mortgages and other debts, funeral and administration expenses, and any losses during estate administration. These reduce the taxable estate dollar for dollar.
- Enter charitable bequests. Amounts left to qualifying charities are fully deductible from the taxable estate, which is why charitable giving is a classic estate-planning tool.
- Indicate marital status. Bequests to a surviving spouse are generally fully deductible, and married couples can combine exemptions through “portability.” Select the appropriate option so the calculator applies the right exemption.
- Review the exemption applied. The calculator uses the federal basic exclusion amount ($15 million per person for 2026 under the One Big Beautiful Bill Act, doubled for married couples with portability). The estimator applies the current $15 million figure in its built-in math, matching 2026 law.
- Click Calculate. The tool subtracts deductions and the exemption from the gross estate, then applies the top federal rate of 40% to the remaining taxable amount to produce your estimated tax.
- Run scenarios. Try different estate values, larger charitable gifts, or gifting assets during life to see how each strategy changes the estimated tax. Save or note the scenarios you want to discuss with your advisor.
How Estate Tax Is Calculated: Method and Formula
Federal estate tax is computed in a specific sequence defined by the tax code. First, you determine the gross estate, which is broader than most people expect. It includes not just what the person owned outright, but also certain assets they controlled or had interests in, such as revocable trusts, jointly owned property, and life insurance policies they owned. The IRS values everything at fair market value on the date of death (or an alternate valuation date six months later, if the executor elects it).
Next, you subtract allowable deductions, debts, funeral and administration costs, bequests to a surviving spouse (the unlimited marital deduction), and charitable bequests, to arrive at the taxable estate.
Then the exemption (basic exclusion amount) is applied. Each person gets a lifetime exemption covering both lifetime taxable gifts and the estate at death, The exemption was $13.61 million in 2024 and $13.99 million in 2025; the One Big Beautiful Bill Act, enacted in July 2025, set it at $15 million per individual for 2026 and made that level permanent, with inflation indexing after 2026. Married couples can effectively double this through portability. Only the amount above the exemption is taxed.
Finally, tax rates apply to the amount above the exemption. The federal tax is progressive from 18% to a top rate of 40%, but because the exemption is so large, nearly all taxable estates land entirely in the 40% bracket, which is why this calculator uses the simplified 40% rate.
Formula Breakdown
Taxable estate = Gross estate – Debts and expenses – Charitable bequests – Marital deduction
Taxable amount = max(0, Taxable estate – Exemption)
Estimated tax = Taxable amount x 40%
Variables Explained
- Gross estate: The total fair market value of all assets included under estate tax rules. This is usually the largest and hardest number to pin down, especially with business interests or real estate that need professional appraisals.
- Debts and expenses: Mortgages, loans, credit balances, funeral costs, legal and executor fees. Every deductible dollar here directly reduces the taxable estate.
- Charitable bequests: Gifts to qualifying nonprofits, fully deductible. This is the variable you control most directly for tax planning.
- Marital deduction: Assets passing to a surviving spouse are generally fully deductible, which is why the first spouse to die in most married couples owes no estate tax.
- Exemption: The lifetime basic exclusion amount ($15M per person for 2026 under the One Big Beautiful Bill Act; it was $13.99M in 2025; double with portability). It is set by Congress and indexed for inflation, so verify the current figure.
- 40% rate: The top federal marginal rate, used here as a planning simplification since virtually all taxable amounts fall in this bracket.
Limitations
This estate tax calculator estimates federal tax only and uses simplified 40% math instead of the full progressive bracket table. It does not account for state estate or inheritance taxes, which often kick in at much lower thresholds (some states start around $1-2 million). It does not model lifetime taxable gifts that reduce the available exemption, valuation discounts for family businesses, generation-skipping transfer tax, or the effects of trusts. Exemption amounts are subject to legislation; major tax laws have repeatedly raised, lowered, or scheduled sunsets for the exclusion. This tool is for educational planning only and is not legal or tax advice.
Worked Example: Estimating Estate Tax
Let us work through a realistic example. Robert is single and passes away with a gross estate of $20 million, consisting of a $6 million home, $10 million in investments, a $3 million business interest, and $1 million in life insurance he owned. His executor identifies $500,000 in deductible debts and expenses (mortgage balance, funeral costs, legal fees), and his will leaves $1 million to charity.
First, compute the taxable estate: $20,000,000 minus $500,000 in debts and expenses minus $1,000,000 in charitable bequests equals $18,500,000. Next, apply the single-person exemption of $15,000,000. The taxable amount above the exemption is $18,500,000 minus $15,000,000, which equals $3,500,000. Finally, apply the 40% rate: $3,500,000 times 0.40 gives an estimated federal estate tax of $1,400,000 under 2026 law.
Planning changes the picture: if Robert had been married, the marital deduction and portability would likely have eliminated the tax. Had he raised charitable bequests to $4.5 million, the taxable estate would have fallen to the $15 million exemption and the tax would have dropped to zero.
Sample Inputs and Outputs
| Gross Estate | Deductions | Filing | Taxable Amount | Est. Tax (40%) |
|---|---|---|---|---|
| $5,000,000 | $200,000 | Single | $0 | $0 |
| $10,000,000 | $300,000 | Single | $0 | $0 |
| $15,000,000 | $400,000 | Single | $0 | $0 |
| $20,000,000 | $1,500,000 | Single | $3,500,000 | $1,400,000 |
| $20,000,000 | $1,500,000 | Married | $0 | $0 |
| $30,000,000 | $1,000,000 | Single | $14,000,000 | $5,600,000 |
The table assumes the $15 million individual exemption for 2026 ($30 million with portability for married couples), matching this calculator. Notice the cliff effect: estates under the exemption owe nothing, while every dollar above it is effectively taxed at 40%. This is why exemption tracking is the single most important number in estate planning.
State Estate Tax Exemptions at a Glance
Twelve states plus the District of Columbia levy their own estate tax, most with exemptions far below the federal $15 million. Approximate figures (they change with state legislation, so verify with your state revenue department):
| State | Approx. exemption | Top rate | State | Approx. exemption | Top rate |
|---|---|---|---|---|---|
| Oregon | $1 million | 16% | Massachusetts | $2 million | 16% |
| Washington | $2.19 million | 20% | Rhode Island | $1.77 million | 16% |
| Minnesota | $3 million | 16% | Illinois | $4 million | 16% |
| District of Columbia | $4.87 million | 16% | Maryland | $5 million | 16% |
| Vermont | $5 million | 16% | Hawaii | $5.49 million | 20% |
| New York | $6.94 million | 16% | Maine | $7 million | 12% |
| Connecticut | $15 million | 12% |
Five other states — Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania — levy an inheritance tax on beneficiaries instead; Maryland is the only state with both taxes. This calculator estimates federal tax only, so if the deceased lived in one of these states, add the state layer to your planning.
Frequently Asked Questions
What is the federal estate tax exemption for 2026?
The federal estate tax exemption is $15 million per person for deaths in 2026 ($30 million for a married couple using portability). The One Big Beautiful Bill Act, enacted in July 2025, made this level permanent and indexed it for inflation from 2027; the exemption was $13.99 million in 2025 and $13.61 million in 2024. This page’s calculator applies the same $15 million figure in its built-in estimate, matching 2026 law.
Who actually pays the estate tax, the estate or the heirs?
The estate itself pays the tax before assets are distributed to heirs. The executor files Form 706 and pays from estate funds before heirs receive the remainder. This is different from an inheritance tax, which in the few states that have one is paid by the individual inheritors.
What is the difference between estate tax and inheritance tax?
Estate tax is levied on the total estate before distribution and is paid by the estate; the federal government and about a dozen states have one. Inheritance tax is levied on what each beneficiary receives and is paid by the heirs; a handful of states impose it, with rates often depending on the heir’s relationship to the deceased. The federal government has no inheritance tax.
Do states have their own estate taxes with lower exemptions?
Yes, and this surprises many families. While the federal exemption is over $13 million, several states set their exemptions as low as $1-2 million. An estate that owes zero federal tax can still owe substantial state estate tax.
How can I legally reduce my estate tax exposure?
Common strategies include lifetime gifting (using the annual gift tax exclusion), charitable trusts and bequests, irrevocable life insurance trusts (so insurance stays out of the estate), family limited partnerships with valuation discounts, and portability elections for married couples.
What is portability and how does it help married couples?
Portability lets a surviving spouse inherit the deceased spouse’s unused federal exemption, effectively doubling the couple’s shield to over $27 million. It requires the executor to file Form 706 electing portability, even when no tax is owed.
Does life insurance count toward the taxable estate?
It depends on ownership. If the deceased owned the policy, the death benefit is included in the gross estate, which surprises many people holding large policies. If the policy is owned by an irrevocable life insurance trust (ILIT) or by another person, it is generally excluded.
Is the result from this calculator the same as what I would file on a tax return?
No. This tool gives a planning estimate using simplified 40% math and the configured exemption. An actual estate tax return (Form 706) applies the full progressive rate schedule, accounts for lifetime taxable gifts that reduce the exemption, and follows detailed valuation rules.
How much is estate tax on a $20 million estate?
Under 2026 law, a $20 million gross estate with $1 million in deductions leaves $19 million; after the $15 million exemption, $4 million is taxable, which works out to roughly $1.6 million of federal estate tax. This page’s calculator applies the same $15 million exemption, so it shows the same figure — about $1.6 million — for this estate. Married couples can combine exemptions through portability, often wiping out the tax entirely. These are planning estimates — an estate attorney should review any real filing.
What changed in the 2026 estate tax law?
The One Big Beautiful Bill Act (enacted July 4, 2025) permanently set the federal estate, gift and generation-skipping transfer tax exemption at $15 million per person starting in 2026, with inflation indexing afterward. It cancelled the scheduled Tax Cuts and Jobs Act sunset, under which the exemption would have fallen to roughly $7 million in 2026. The top estate tax rate remains 40%, portability between spouses is unchanged, and the annual gift tax exclusion remains $19,000 per recipient (2025–2026).
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