Estate Tax Calculator

The short answer

• For deaths in 2026 the basic exclusion is $15,000,000 a person. It rises with inflation from 2027.
• Above the exclusion, every dollar is taxed at 40%.
• Everything left to a spouse who is a US citizen, and everything left to charity, is deducted in full.
• A $20,000,000 estate with $800,000 of debts and costs owes $1,680,000, or 8.4% of the estate.
• Twelve states and Washington, DC, have their own estate tax, and five states tax inheritances. Several start at $1,000,000 to $5,000,000.

Who pays estate tax

The federal estate tax is a tax on the transfer of property at death. It is paid by the estate, out of the assets, before heirs receive their shares. The heirs do not pay it themselves, and they do not report what they inherit as income. That is the main difference from an inheritance tax, which a handful of states charge to the person who inherits, at a rate that depends on how closely they were related.

Because the exclusion is so high, only a tiny share of estates owe anything. Most families never file an estate tax return at all. The tax still matters to anyone with a large business, a lot of real estate, or a big life insurance policy, and to couples who want to keep the option of passing on two full exclusions.

The $15 million exclusion

The basic exclusion amount is $15,000,000 for a person who dies in 2026. The One Big Beautiful Bill Act (Public Law 119-21), signed in July 2025, set it at that figure and made it permanent, with inflation increases from 2027. Before the law, the higher exclusion from the 2017 tax law was due to fall back to about half its level in 2026.

The exclusion works as a credit, called the applicable credit amount. The IRS works out the tax on the whole estate using the rate schedule, then subtracts the tax that the schedule would charge on $15,000,000: $5,945,800. Since the schedule reaches 40% at $1,000,000, the effect is simple: nothing is due up to the exclusion, and 40% is due on everything above it.

What counts in the estate

The gross estate is everything the person owned or controlled at death, at fair market value on the date of death. It includes:

• Homes, land and rental property, including the person’s share of anything owned jointly.
• Bank accounts, brokerage accounts, stocks, bonds and funds.
• Traditional and Roth IRAs, 401(k)s and pensions with a survivor benefit.
• Business interests: a share of an LLC, partnership or corporation, valued as a whole.
• Life insurance on the person’s life, if they owned the policy or could change the beneficiary.
• Cars, art, jewelry, collections and other personal property.
• Assets in a revocable living trust. A revocable trust avoids probate but not estate tax.

Life insurance is the item that most often surprises families. A $5,000,000 policy owned by the insured person counts in full, even though the money goes straight to the beneficiary. An irrevocable life insurance trust that owns the policy keeps it out.

What comes off

The taxable estate is the gross estate less these deductions:

• Debts: mortgages, loans, credit cards and unpaid income tax.
• Funeral and administration costs: the funeral, executor and attorney fees, appraisals and court costs.
• The marital deduction: everything left to a spouse who is a US citizen, with no limit.
• The charitable deduction: everything left to qualifying charities, with no limit.
• State death taxes: estate or inheritance tax paid to a state.

Taxable gifts made during life are then added back, because the estate and gift taxes share one exclusion. The calculator follows the same order: gross estate, less deductions, plus lifetime gifts, then the tax on the total less the credit.

A worked example

A widowed person dies in 2026 owning $20,000,000 of property, with a $500,000 mortgage and $300,000 of funeral and settlement costs.

The $4,200,000 above the exclusion is taxed at 40%, which gives the same $1,680,000. The heirs receive $17,520,000. The tax is 8.4% of the gross estate, even though the rate on the top slice is 40%.

The rate schedule

The estate and gift taxes use one schedule in section 2001(c) of the tax code. It starts at 18% and climbs to 40% on amounts over $1,000,000. The lower steps only matter in working out the credit: because the exclusion is far above $1,000,000, any estate that owes tax pays 40% on every dollar over the exclusion.

The tentative tax on $1,000,000 is $345,800, and on $15,000,000 it is $5,945,800. That second figure is the 2026 credit.

Gifts and the estate share one exclusion

The $15,000,000 covers both gifts made in life and the estate at death. Gifts above the annual exclusion are reported on Form 709 and use up part of it. Nobody pays gift tax until their lifetime taxable gifts pass the exclusion.

At death, those taxable gifts are added back to the taxable estate. In the example, if the person had also made $2,000,000 of taxable gifts in life, the tax base becomes $21,200,000 and the estate tax rises from $1,680,000 to $2,480,000. The gifts still helped: any growth on the money given away happened outside the estate.

The $19,000 annual exclusion

In 2026 you can give up to $19,000 to each person you choose without filing a gift tax return and without using any of your $15,000,000. A married couple can give $38,000 to each person by splitting gifts (they file Form 709 to elect it unless each gives from their own money). The amount is the same as in 2025.

Some gifts are free of gift tax with no limit at all:

• Tuition paid directly to a school or college.
• Medical bills paid directly to the doctor or hospital.
• Gifts to a spouse who is a US citizen.
• Gifts to charity and to political organizations.

A gift of $19,000 into a 529 plan counts against the annual exclusion, but a special rule lets you count up to five years of exclusions at once, so you can front-load $95,000 for one child in a single year.

What a gifting plan saves

Annual gifts are the simplest way to shrink a taxable estate. Every dollar given away within the annual exclusion leaves the estate without touching the $15,000,000.

On an estate already above the exclusion, each dollar moved out saves 40 cents. The couple giving to four children and grandchildren for ten years moves $1,520,000 out and saves $608,000 of estate tax, plus 40% of whatever that money would have earned. On an estate under the exclusion, gifts save no federal estate tax at all, though they may still save state estate tax.

Leaving everything to a spouse

Anything left to a surviving spouse who is a US citizen is deducted in full, so a married person who leaves everything to their spouse owes no estate tax on the first death, however large the estate. The tax is postponed, not removed: what the survivor still owns at their own death is taxed in their estate.

Property can pass to a spouse outright or through a trust that qualifies for the deduction, such as a QTIP trust, which pays the survivor income for life and then goes to the children of the first marriage.

Portability and the DSUE

When the first spouse dies, any exclusion they didn’t use can pass to the survivor. This is the deceased spousal unused exclusion, or DSUE. It is not automatic: the executor must file Form 706 and elect it, even if no tax is due.

Say a spouse died in 2025, when the exclusion was $13,990,000, and left everything to the survivor. If portability was elected, the survivor who dies in 2026 has $15,000,000 of their own plus $13,990,000 of DSUE: $28,990,000. On a $40,000,000 estate, that brings the tax down from $10,000,000 to $4,404,000.

The DSUE is fixed at the figure when the first spouse died; it does not grow with inflation. It also comes from the most recent late spouse only, so it can be lost on remarriage if the new spouse dies first.

A spouse who is not a citizen

The unlimited marital deduction applies only to a spouse who is a US citizen. Property left to a non-citizen spouse is taxed unless it passes through a qualified domestic trust (QDOT), which postpones the tax until the money is paid out. During life, gifts to a non-citizen spouse are free of gift tax only up to $194,000 in 2026.

Leaving money to charity

Bequests to qualifying charities are deducted in full. In the $20,000,000 example, leaving $2,000,000 to charity cuts the tax from $1,680,000 to $880,000. The gift costs the other heirs only $1,200,000, because $800,000 of it would otherwise have gone in tax.

Retirement accounts are often the best assets to leave to charity: a charity pays no income tax on a traditional IRA, while a child would pay income tax on every withdrawal.

State estate and inheritance taxes

Twelve states and Washington, DC, charge their own estate tax, and five states charge an inheritance tax. Maryland charges both. Many state exemptions are far below the federal one, so a $3,000,000 estate can owe nothing federally and still owe a state.

The inheritance tax states are Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania. Spouses are exempt in all five, and children are exempt everywhere except Nebraska and Pennsylvania, which tax them at low rates. Iowa ended its inheritance tax in 2025. Several exemptions are indexed and change each year, and New York has a "cliff": an estate more than 5% over the exemption loses it entirely. The calculator flags these states but doesn’t work out the state bill.

Step-up in basis

Heirs who inherit stocks, a home or other property get a new cost basis equal to its value at death. If a parent bought shares for $100,000 that are worth $1,000,000 at death, the child can sell them for $1,000,000and owe no capital gains tax. This is often worth more to a family than estate planning, and it is a reason to keep highly appreciated assets until death rather than give them away. A gift during life keeps the giver’s old basis.

Our capital gains tax calculator shows what selling an inherited asset later would cost.

Retirement accounts and life insurance

Traditional IRAs and 401(k)s are taxed twice in a large estate: estate tax on their value, then income tax when heirs withdraw. Most non-spouse heirs must empty an inherited account within ten years. Heirs can claim an income tax deduction for the estate tax paid on the account (income in respect of a decedent), which softens the overlap. A spouse can roll the account into their own IRA.

Roth accounts carry no income tax for heirs. Converting to a Roth during life shrinks the estate by the income tax paid. Our Roth IRA calculator shows how a Roth grows.

Form 706 and deadlines

• An estate must file Form 706 if the gross estate plus lifetime taxable gifts is over the exclusion, even if deductions bring the tax to zero.
• The return and any tax are due nine months after death. A six-month extension to file is available, but the tax is still due at nine months.
• To elect portability, a smaller estate can file within five years of death under a simplified IRS procedure.
• Gift tax returns (Form 709) are due by April 15 of the year after the gift: April 15, 2027, for gifts made in 2026.

Estates that are mostly a family business can sometimes pay the tax over up to 14 years, and farms and businesses can use special-use valuation. An estate attorney or CPA handles these.

How the exclusion has changed

The exclusion has risen sharply over the past 25 years. A few markers:

Because the figure is now indexed to inflation from 2027, it should keep rising slowly. Congress can change it again, so plans built around a single number are worth reviewing every few years.

Common mistakes

• Forgetting that life insurance you own counts in your estate.
• Skipping Form 706 on the first death and losing the survivor’s DSUE.
• Ignoring state estate tax, which can start at $1,000,000.
• Giving away appreciated assets in life and losing the step-up in basis, when cash would have done.
• Leaving everything to a non-citizen spouse without a QDOT.
• Assuming a revocable living trust removes assets from the taxable estate.

Using the calculator well

1. Enter the gross estate at today’s market values, including life insurance you own and retirement accounts.
2. Enter debts, and anything left to a spouse or charity.
3. Pick your state to see if it has its own estate or inheritance tax.
4. Under More options, add taxable gifts from past Form 709s, any DSUE from a late spouse, and a gifting plan.
5. Check the table to see how the tax changes as the estate grows.

To see how an estate might grow before then, try our compound interest calculator; to plan income in retirement, the retirement calculator.

Key numbers