How the Estate Tax Calculator Works
The federal estate tax is a tax on the value of what a person leaves behind when they die. It sounds alarming, but it affects very few families, because the U.S. lets each person leave a very large amount tax-free. Only the part of an estate above that amount is taxed. The Estate Tax Calculator shows whether an estate is over the limit, and how much tax would be due.
What you enter
- Total value of the estate: everything the person owned at death. That includes property, investments, bank accounts, business interests and life insurance the person owned.
- Debts, funeral and administration costs: mortgages, loans and the cost of settling the estate. They are deducted.
- Gifts to charity: amounts left to qualified charities. They are deducted.
- Left to a surviving spouse: deducted without limit, if the spouse is a U.S. citizen. This is the marital deduction.
- Lifetime taxable gifts: gifts made during life above the yearly gift exclusion. They use up part of the exclusion.
- Federal exclusion: the amount one person can leave tax-free. The calculator fills in the 2026 figure of $15,000,000, and you can change it.
- Spouse's unused exclusion: a surviving spouse can add the part of the exclusion that the first spouse did not use, if the first estate elected it. This is called portability.
- State estate tax: an optional flat estimate, because some states tax estates much smaller than the federal limit.
How the tax is worked out
estate after deductions = estate - debts and costs - charity - spouse federal taxable estate = estate after deductions - state estate tax amount over the exclusion = federal taxable estate + lifetime taxable gifts - exclusion federal estate tax = amount over the exclusion x 40%
Only the amount over the exclusion is taxed. The rate on it is a flat 40%. Any state estate tax is worked out first, and it is deductible when working out the federal tax.
A worked example
A person leaves an estate of $20,000,000, with $500,000 of debts and costs, and nothing to a spouse or charity.
| Step | Amount |
|---|---|
| Estate after deductions | $19,500,000 |
| Exclusion | $15,000,000 |
| Amount over the exclusion | $4,500,000 |
| Federal estate tax at 40% | $1,800,000 |
| Left for heirs | $17,700,000 |
The tax is $1.8 million, which is 9% of the estate. Even though the rate is 40%, only the slice above $15 million is taxed.
Chart: where the $20,000,000 goes
Debts and costs █ 2.5% $500,000 Federal tax ████ 9% $1,800,000 Heirs keep ████████████████████████████████████████ 88.5% $17,700,000
How a spouse changes things
- Left to a spouse: if $10,000,000 of the same estate goes to a surviving U.S.-citizen spouse, the taxable estate falls to $9,500,000, which is under the exclusion. No federal estate tax is due.
- Portability: if the surviving spouse has $10,000,000 of unused exclusion from the first spouse, their total exclusion is $25,000,000, and the $19,500,000 estate owes nothing.
- Lifetime gifts: if the person had made $3,000,000 of taxable gifts, that amount is added back, and the tax on the example estate rises to $3,000,000.
Estates of different sizes
With a $15,000,000 exclusion, and no other adjustments:
| Estate after deductions | Estate tax | Share of the estate |
|---|---|---|
| $10,000,000 | $0 | 0% |
| $15,000,000 | $0 | 0% |
| $20,000,000 | $2,000,000 | 10% |
| $30,000,000 | $6,000,000 | 20% |
| $50,000,000 | $14,000,000 | 28% |
$20 million ██████████████ 10% $30 million █████████████████████████████ 20% $50 million ████████████████████████████████████████ 28%
The share rises with the size of the estate, and approaches 40% for very large estates.
State estate and inheritance taxes
Some states have their own estate tax, with exemptions far below the federal amount. Other states have an inheritance tax, which is paid by the heirs instead of the estate. Rates and exemptions vary and often have brackets. The calculator uses one flat rate as a rough estimate. For example, a 12% rate over a $2,000,000 exemption adds $2,100,000 of state tax to the example estate, and lowers the federal tax to $960,000.
Things to know
- The federal exclusion is set by law and has changed several times. Check irs.gov for the current amount.
- The estate tax is linked to the gift tax. The same exclusion covers both lifetime gifts and what you leave at death.
- Careful planning, such as trusts and gifts, can reduce the tax. That is a job for an estate attorney.
- Assets in some retirement accounts and life insurance policies can be counted in the estate. Ask an adviser how yours are treated.
What this calculator does not include
- Generation-skipping transfer tax, gift tax already paid, and other credits.
- Special valuation rules for farms, small businesses and closely held companies.
- The exact way each state calculates its estate or inheritance tax.
- Property owned jointly or held in trust, whose treatment can differ. Enter only what counts in the estate.
This tool gives an estimate for general information only. It is not legal or tax advice. Estate law is complex and changes often, so talk to a qualified estate attorney or tax professional.