Estate Tax Calculator — 2025 federal exemption & 40% rate

The estate tax calculator above estimates what the federal government would collect from an estate after someone passes away, based on the 2025 exemption and rate schedule. For the vast majority of American families, this number is $0 — the federal estate tax only applies once an estate's taxable value clears roughly $13.99 million per person, a threshold that puts well over 99% of estates outside the tax entirely.

Still, for high-net-worth families, business owners, and anyone holding significant real estate or investment portfolios, understanding exactly how the exemption, marital deduction, and charitable deduction interact is essential to planning ahead. Arb Digital built this calculator so you can run real numbers instead of guessing, and see precisely where the taxable line sits for your situation.

What This Estate Tax Calculator Does

You enter the gross value of the estate, subtract debts and administrative expenses, then apply any marital deduction (assets passing to a surviving spouse) and charitable bequests. What's left is the "taxable estate." The calculator compares that figure against the 2025 federal exemption of approximately $13.99 million per person, reduced by any lifetime exemption already used through large gifts, and applies the flat 40% top federal estate tax rate to anything above that threshold.

How to Use It

1. Enter the gross estate value. Add up real estate, brokerage and retirement accounts, business interests, life insurance proceeds owned by the deceased, and personal property.
2. Enter debts and expenses. Include outstanding mortgages, loans, funeral costs, and estate administration or legal fees — these reduce the taxable estate.
3. Enter the marital deduction, if applicable. Any amount passing outright to a surviving US-citizen spouse is generally deductible in full.
4. Enter charitable bequests. Gifts to qualifying charities in the will or trust are fully deductible from the taxable estate.
5. Enter lifetime exemption already used. If the deceased made large taxable gifts during their life, that amount reduces the exemption available at death.
6. Click Calculate to see the taxable estate, exemption available, amount over the threshold, and estimated tax at 40%.

The Formula / How It's Calculated

The math follows the structure the IRS uses on Form 706. Start with the gross estate, subtract debts and administrative expenses to get the "adjusted gross estate," then subtract the unlimited marital deduction and the charitable deduction to arrive at the taxable estate. That taxable estate is then compared to the unified lifetime exemption — about $13.99 million per person for 2025, per IRS estate tax guidance — minus whatever portion of that exemption was already consumed by lifetime taxable gifts. Any amount that exceeds the remaining exemption is taxed at a flat 40%, which is the top federal estate tax rate and applies uniformly to the excess rather than through graduated brackets like income tax.

Portability Between Spouses

One of the most valuable and most overlooked features of current estate tax law is "portability." When one spouse dies and doesn't use their full exemption, the unused portion can be transferred to the surviving spouse — but only if the executor files Form 706 and elects portability, even when no tax is owed. This effectively lets a married couple shield close to $28 million combined from federal estate tax as of 2025. Skipping this election is one of the most common and costly estate planning mistakes, because once the filing deadline passes (generally within five years under current relief provisions), the unused exemption can be lost permanently. Anyone whose spouse recently passed away with any meaningful estate should confirm with their executor or attorney that a portability election was filed, even if the estate seemed too small to owe tax.

The 2026 Sunset Risk

Estate tax exemption levels have shifted before and can shift again through legislation. Under the framework set by the Tax Cuts and Jobs Act, the historically high exemption amount was scheduled to roughly halve at the start of 2026 absent new legislation, which for years created urgency for wealthy families to use large lifetime gifts before a potential drop. Congress can and does adjust these thresholds, so anyone with an estate near or above the exemption level should check current-year figures directly with a CPA or estate attorney rather than relying on last year's numbers, and should revisit their plan whenever exemption levels are updated. This calculator uses the 2025 figures as a clearly labeled illustrative benchmark — always confirm the current year's exemption before making irreversible decisions.

Assets That Commonly Surprise Families

When people estimate their own gross estate, they typically start with obvious items — the house, the brokerage account, the retirement accounts — and stop there. But the gross estate for federal purposes is much broader. It includes the full death-benefit value of any life insurance policy the deceased owned personally, even though the payout goes directly to a named beneficiary and never passes through probate. It includes the deceased's share of jointly owned property, business interests valued at fair market value (not book value, which is often far lower), vested but unpaid bonuses, and even certain retained interests in trusts the deceased created but didn't fully give up control of. Families are frequently surprised to learn that a $2 million life insurance policy meant to help heirs pay estate tax can itself push the estate over the exemption threshold if it's owned by the deceased rather than held inside an irrevocable life insurance trust (ILIT). This is one of the most common and most fixable estate planning oversights.

Trusts and Advanced Planning Tools

Families whose estates sit near or above the exemption threshold typically use specialized trusts to reduce what counts in the taxable estate while still providing for heirs. An irrevocable life insurance trust removes life insurance proceeds from the gross estate entirely, since the trust — not the deceased — technically owns the policy. Grantor retained annuity trusts (GRATs) let a person transfer future appreciation of an asset to heirs while retaining an income stream, often at a very low or even zero gift tax cost. Qualified personal residence trusts (QPRTs) can move a home out of the taxable estate at a discounted value while the original owner continues living in it for a set term. These tools are not simple do-it-yourself moves — they require an estate attorney to draft correctly and typically make sense only once an estate is projected to exceed the exemption, but for those families they can meaningfully change the number this calculator produces.

State Estate and Inheritance Taxes Are Separate

This calculator estimates federal estate tax only. A number of states — including Massachusetts, Oregon, Washington, New York, and others — impose their own estate taxes with exemption thresholds far lower than the federal amount, sometimes as low as $1 million to $2 million. A handful of states, like Pennsylvania and Nebraska, impose a separate inheritance tax paid by the beneficiary rather than the estate, with rates that vary by the heir's relationship to the deceased. If the estate you're planning for is located in, or the deceased was domiciled in, one of these states, run the numbers against that state's specific rules in addition to this federal estimate, since a mid-sized estate that owes nothing federally can still owe a state estate or inheritance tax.

Common Mistakes to Avoid

• Forgetting to elect portability. Failing to file Form 706 to transfer a deceased spouse's unused exemption can cost millions in avoidable future tax.
• Overlooking life insurance in the gross estate. Policies owned by the deceased (not held in an irrevocable trust) count toward the gross estate at full death benefit value, which surprises many families.
• Ignoring state-level estate or inheritance tax. An estate that owes nothing federally can still owe a substantial state-level tax with a much lower threshold.
• Not updating the plan for exemption changes. The exemption amount has changed by legislation before and can change again; stale assumptions can lead to under- or over-planning.
• Assuming lifetime gifts and the estate are calculated separately. They share one unified exemption, so large lifetime gifts reduce what's available at death.

Related Free Tools From Arb Digital

Since lifetime gifting and estate planning share the same exemption, it's worth checking the gift tax calculator to see how large gifts affect the number above. If the estate includes appreciated stock or real estate, the capital gains tax calculator shows what heirs or the estate might owe on a future sale. Business owners and retirees planning around large retirement accounts may also find the roth conversion calculator useful for reducing a taxable estate over time, and the final expense calculator helps estimate the costs that reduce the gross estate. See every calculator on our free online tools hub.

Frequently Asked Questions

This tool provides general estimates for educational purposes only and is not financial, tax, legal, or medical advice. Figures are illustrative; consult a licensed professional for decisions.