Estate Tax Calculator Guide
Data Notice: Figures, rates, and statistics cited in this article are based on the most recent available data at time of writing and may reflect projections or prior-year figures. Always verify current numbers with official sources before making financial, medical, or educational decisions.
Estate Tax Calculator Guide
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
The federal estate tax applies to the transfer of a deceased person’s assets when the total value exceeds the lifetime exemption amount. For 2026, the federal estate tax exemption is approximately $13,990,000 per individual ($27,980,000 for married couples using portability). Estates exceeding the exemption are taxed at graduated rates up to ~40%. In addition, ~12 states and the District of Columbia impose their own estate taxes, often with much lower exemption thresholds. This guide explains how estate tax calculations work, key variables, and how to estimate your potential estate tax liability.
Federal Estate Tax Rates (2026)
| Taxable Estate (Above Exemption) | Rate |
|---|---|
| $0 — ~$10,000 | ~18% |
| ~$10,001 — ~$20,000 | ~20% |
| ~$20,001 — ~$40,000 | ~22% |
| ~$40,001 — ~$60,000 | ~24% |
| ~$60,001 — ~$80,000 | ~26% |
| ~$80,001 — ~$100,000 | ~28% |
| ~$100,001 — ~$150,000 | ~30% |
| ~$150,001 — ~$250,000 | ~32% |
| ~$250,001 — ~$500,000 | ~34% |
| ~$500,001 — ~$750,000 | ~37% |
| ~$750,001 — ~$1,000,000 | ~39% |
| Over ~$1,000,000 | ~40% |
How to Calculate Federal Estate Tax
Step 1: Determine Gross Estate Value
The gross estate includes the fair market value of all assets owned at death:
| Asset Category | Examples |
|---|---|
| Real property | Primary home, vacation homes, rental properties |
| Financial accounts | Bank accounts, brokerage accounts, retirement accounts |
| Business interests | Sole proprietorships, partnership interests, LLC membership interests |
| Life insurance | Death benefit proceeds from policies owned by the decedent |
| Personal property | Vehicles, jewelry, art, collectibles |
| Other | Trust assets, jointly held property (proportional share) |
Step 2: Subtract Allowable Deductions
| Deduction | Description |
|---|---|
| Funeral expenses | Reasonable funeral and burial costs |
| Administrative expenses | Executor fees, legal fees, accounting fees |
| Debts and mortgages | Outstanding liabilities at death |
| Marital deduction | Unlimited deduction for assets passing to a surviving U.S. citizen spouse |
| Charitable deduction | Unlimited deduction for assets passing to qualified charities |
| State estate tax deduction | State estate taxes paid may be deducted |
Step 3: Calculate Taxable Estate
Taxable Estate = Gross Estate - Deductions
Step 4: Apply the Exemption
Estate Tax Base = Taxable Estate - Exemption (~$13,990,000)
If the result is zero or negative, no federal estate tax is owed.
Step 5: Calculate Tax
Apply the graduated rate schedule to the amount exceeding the exemption.
Example Calculation
| Component | Amount |
|---|---|
| Gross estate | ~$18,000,000 |
| Deductions (debts, expenses) | ~$500,000 |
| Taxable estate | ~$17,500,000 |
| Less exemption | ~$13,990,000 |
| Estate tax base | ~$3,510,000 |
| Estimated federal estate tax | ~$1,346,800 |
| Effective rate on entire estate | ~7.70% |
Portability for Married Couples
When the first spouse dies, any unused portion of their ~$13,990,000 exemption can be transferred to the surviving spouse through a portability election on Form 706. This allows married couples to shelter up to ~$27,980,000 combined without the need for complex trust planning.
Requirements for portability:
- Form 706 must be filed for the first spouse to die, even if no tax is owed
- The election must be made timely (within ~9 months of death, with possible extensions)
- Only the most recently deceased spouse’s unused exemption can be ported
State Estate Taxes
| State | Exemption | Top Rate |
|---|---|---|
| Connecticut | ~$13,990,000 (matches federal) | ~12% |
| Hawaii | ~$5,490,000 | ~20% |
| Illinois | ~$4,000,000 | ~16% |
| Maine | ~$6,800,000 | ~12% |
| Maryland | ~$5,000,000 | ~16% |
| Massachusetts | ~$2,000,000 | ~16% |
| Minnesota | ~$3,000,000 | ~16% |
| New York | ~$6,940,000 | ~16% |
| Oregon | ~$1,000,000 | ~16% |
| Rhode Island | ~$1,774,583 | ~16% |
| Vermont | ~$5,000,000 | ~16% |
| Washington | ~$2,193,000 | ~20% |
| D.C. | ~$4,710,800 | ~16% |
States with low exemptions (Oregon at ~$1,000,000, Massachusetts at ~$2,000,000) can catch estates that are far below the federal threshold.
Comparison: Estate Tax vs. Inheritance Tax
| Feature | Estate Tax | Inheritance Tax |
|---|---|---|
| Who pays | The estate | The heir/beneficiary |
| Based on | Total estate value | Amount each heir receives |
| Federal version | Yes | No |
| States that impose | ~12 + D.C. | ~6 states |
| Exemption | Per estate | Per beneficiary (varies) |
Six states impose inheritance taxes: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland is the only state with both an estate tax and an inheritance tax.
Tips for Estate Tax Planning
-
File Form 706 for portability. Even if the first spouse’s estate is below the exemption, filing preserves the unused exemption for the surviving spouse.
-
Use the annual gift exclusion. Gifting up to ~$19,000 per recipient per year reduces your estate without using the lifetime exemption.
-
Consider irrevocable life insurance trusts (ILITs). Life insurance owned by an ILIT is excluded from the taxable estate, potentially saving ~40% on the death benefit.
-
Monitor the exemption sunset. The elevated exemption is set to potentially decrease under TCJA sunset provisions. Act before any reduction takes effect.
-
Maximize the marital deduction. Assets passing to a surviving U.S. citizen spouse are fully exempt from estate tax through the unlimited marital deduction.
-
Account for state estate taxes. If you live in a state with a lower exemption (like Oregon or Massachusetts), state estate tax may apply even if federal tax does not.
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Get a professional appraisal. Accurate valuation of real estate, business interests, and collectibles is critical for correct calculations.
Key Takeaways
- The 2026 federal estate tax exemption is
$13,990,000 per individual ($27,980,000 for married couples with portability). - The top federal estate tax rate is ~40%, applied to amounts above the exemption.
- ~12 states and D.C. have separate estate taxes with exemptions as low as ~$1,000,000 (Oregon).
- The unlimited marital deduction allows tax-free transfers between spouses.
- Portability requires filing Form 706 for the first spouse to die.
- The elevated exemption may decrease under TCJA sunset provisions.
Next Steps
- Federal Income Tax Guide 2026 — How estate distributions affect income tax.
- State Income Tax Rates Comparison 2026 — States with estate taxes vs. income taxes.
- Tax Bracket Calculator — Estimate tax on inherited assets.
- Self-Employment Tax Guide — Business succession and estate planning.
- Find a CPA Near You — Get professional estate tax planning help.