Estate Tax Calculator
🌙Calculate federal and state estate taxes, plan your estate, and minimize tax liabilities.
| Tax Component | Amount |
|---|---|
| Federal Estate Tax | $0 |
| State Estate Tax | $0 |
| Taxable Estate | $0 |
| Effective Tax Rate | 0% |
Understanding Estate Taxes: A Comprehensive Guide
Estate taxes, often called "death taxes," are levied on the transfer of property upon a person's death. The federal government and some states impose these taxes on estates that exceed certain exemption thresholds. Our Estate Tax Calculator helps you estimate potential tax liabilities and plan accordingly to minimize the tax burden on your heirs.
What is the Federal Estate Tax Exemption?
The federal estate tax exemption is the amount you can transfer upon death without incurring federal estate tax. For 2025, the exemption is projected to be $13.61 million per individual ($27.22 million for married couples). Estates valued above this threshold are subject to federal estate tax at rates ranging from 18% to 40%.
Which States Have Estate or Inheritance Taxes?
While most states don't impose estate or inheritance taxes, several do:
- States with estate taxes: Connecticut, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington
- States with inheritance taxes: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania
Our calculator accounts for both federal and state-level estate taxes based on your location.
Strategies to Reduce Estate Taxes
Proper estate planning can significantly reduce or even eliminate estate taxes:
- Lifetime Gifting: Utilize the annual gift tax exclusion ($18,000 per recipient in 2025) to reduce your taxable estate.
- Irrevocable Trusts: Assets placed in irrevocable trusts are generally excluded from your taxable estate.
- Charitable Donations: Bequests to qualified charities are deductible from your estate.
- Marital Deduction: Unlimited transfers between spouses are generally tax-free.
- Family Limited Partnerships: Can provide valuation discounts for estate tax purposes.
Frequently Asked Questions
What's the difference between estate tax and inheritance tax?
Estate tax is levied on the total value of a deceased person's estate before distribution to heirs. Inheritance tax is imposed on recipients who inherit property or assets. Only a few states have inheritance taxes.
Are retirement accounts subject to estate tax?
Yes, the value of retirement accounts (IRAs, 401(k)s, etc.) is included in your taxable estate. However, designated beneficiaries may be able to stretch distributions over their lifetimes.
How does portability work for married couples?
Portability allows a surviving spouse to use any unused portion of their deceased spouse's federal estate tax exemption. This effectively doubles the exemption for married couples to approximately $27.22 million in 2025.
What is the step-up in basis rule?
Assets inherited receive a "step-up" in basis to their fair market value at the date of death. This eliminates capital gains tax on appreciation that occurred during the decedent's lifetime.
Use our Estate Tax Calculator regularly as part of your comprehensive estate planning strategy. Consult with a qualified estate planning attorney for personalized advice tailored to your specific situation.