2025 Federal & State Estate Tax Calculator
Calculate estate taxes with 2025 exemptions and explore tax-saving strategies
Estate Value & Deductions
Assets Breakdown
Beneficiaries & Deductions
Estate Distribution
Asset Breakdown
Tax Planning Impact
Federal Estate Tax Exemption History
*2026 shows sunset provision (revert to ~$7M adjusted for inflation)
Federal Exemption Status
$13,990,000
Estate is below federal exemption limit
Estate Tax Calculation
0.0%
Estate Planning Tips
- •2025 federal exemption is $13.99M per person ($27.98M for couples)
- •Exemption sunsets in 2026 - will drop to ~$7M unless extended
- •Annual gift exclusion for 2025 is $18,000 per recipient
- •Consider lifetime gifting strategies before sunset provision
Quick Answer: 2025 Estate Tax
For a $20 million estate in 2025:
- Federal Exemption: $13.99 million (single) / $27.98 million (married)
- Taxable Amount: $6.01 million
- Federal Tax Rate: 40%
- Federal Tax Due: $2.404 million
- State Tax: Varies by state (13 states + DC have estate taxes)
Understanding Estate Tax in 2025
The Estate Tax Calculator helps individuals and families estimate federal and state estate tax liabilities for 2025. With the federal exemption at $13.99 million per person, most estates won't owe federal tax, but proper planning is essential for larger estates to minimize tax burden and maximize wealth transfer to beneficiaries.
How to Use This Calculator
Step 1: Enter Estate Value
Input the total gross estate value including all assets: real estate, investments, business interests, personal property, and life insurance proceeds.
Step 2: Add Deductions
Include allowable deductions such as debts, mortgages, funeral expenses, estate administration costs, and charitable bequests.
Step 3: Specify Marital Status
Select your filing status and state. Married couples can combine exemptions for $27.98 million total. State estate taxes vary significantly.
Step 4: Review Planning Strategies
Explore various estate planning tools like GRATs, CRTs, ILITs, and QPRTs to potentially reduce your estate tax liability.
Key Concepts and Formulas
Estate Tax Calculation
Taxable Estate = Gross Estate - Deductions - Exemption
Estate Tax = Taxable Estate × 40%
2025 Federal Exemptions
- Single: $13.99 million
- Married: $27.98 million (with portability)
- Annual Gift Exclusion: $18,000 per recipient
- Lifetime Gift Exemption: Same as estate exemption
Common Planning Strategies
- GRAT: Grantor Retained Annuity Trust - transfer appreciation tax-free
- CRT: Charitable Remainder Trust - income stream plus charitable deduction
- ILIT: Irrevocable Life Insurance Trust - remove life insurance from estate
- QPRT: Qualified Personal Residence Trust - transfer residence at reduced value
Real-World Examples
Example 1: Below Exemption
- Gross Estate: $10 million
- Deductions: $500,000
- Net Estate: $9.5 million
- Federal Exemption: $13.99 million
- Federal Tax: $0 (below exemption)
Example 2: Above Exemption
- Gross Estate: $25 million
- Deductions: $1 million
- Net Estate: $24 million
- Taxable Amount: $10.01 million
- Federal Tax: $4.004 million (40%)
Frequently Asked Questions
What is the 2025 federal estate tax exemption?
The 2025 federal estate tax exemption is $13.99 million per individual ($27.98 million for married couples). Estates valued below this threshold generally owe no federal estate tax.
What happens to the exemption in 2026?
Unless Congress acts, the exemption will sunset on January 1, 2026, reverting to approximately $7 million per person (adjusted for inflation) from the current $13.99 million.
Which states have estate taxes?
As of 2025, 13 states and DC have estate taxes: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington.
What is the marital deduction?
The unlimited marital deduction allows you to transfer any amount of assets to your surviving spouse tax-free, as long as your spouse is a U.S. citizen.
Related Calculators
About This Calculator
Calculate 2025 federal estate tax liability with the $13.61 million exemption threshold. Estimate taxes on estates, plan gifting strategies, and understand portability for married couples.
Frequently Asked Questions
What is the estate tax exemption for 2025?
Federal estate tax exemption for 2025: $13.99 million per individual, $27.98 million per married couple (with proper planning). This is up from $13.61M in 2024 due to inflation adjustments. Tax rate: 40% on amounts exceeding exemption. Important: Current high exemption expires December 31, 2025. Starting 2026, exemption drops to ~$7 million per person (50% reduction) unless Congress acts. State exemptions: 12 states + DC have separate estate taxes with much lower exemptions ($1M-$13.99M).
How does the unlimited marital deduction work?
Unlimited marital deduction allows tax-free transfer of any amount to surviving US citizen spouse, regardless of estate size. However, this can waste first spouse exemption. Better strategy: Use bypass trust (credit shelter trust) to preserve both exemptions. Example: $25M estate, first spouse dies 2025. Option 1: Leave all to spouse = $0 tax now, but at second death: $25M - $13.99M = $11.01M taxable 脳 40% = $4.4M tax. Option 2: $13.99M to bypass trust + $11.01M to spouse = $0 tax both deaths, saving $4.4M. Non-citizen spouse: Limited to $185,000 annual exclusion unless using QDOT.
Which states have estate or inheritance taxes?
Estate tax states (2025): Connecticut ($12.92M exemption), DC ($4.71M), Hawaii ($5.49M), Illinois ($4M), Maine ($6.41M), Maryland ($5M), Massachusetts ($2M), Minnesota ($3M), New York ($6.94M), Oregon ($1M), Rhode Island ($1.77M), Vermont ($5M), Washington ($2.193M). Inheritance tax states: Iowa (phasing out by 2025), Kentucky, Maryland (both estate + inheritance), Nebraska, New Jersey, Pennsylvania. Rates: 1-20% depending on state and beneficiary relationship. Planning tip: Consider moving to no-tax state if approaching thresholds.
What is portability and how does it work?
Portability allows surviving spouse to inherit deceased spouse unused federal estate tax exemption, effectively doubling exemption to $27.98M (2025). Requirements: File Form 706 within 9 months of death (+ 6 month extension) even if no tax due. Must elect portability on return. Example: Husband dies with $3M estate. Unused exemption: $13.99M - $3M = $10.99M transfers to wife. Wife estate tax exemption: $13.99M + $10.99M = $24.98M total. Limitations: Not available for generation-skipping tax, state estate taxes, or if surviving spouse remarries and new spouse dies first.
How is estate tax calculated on a $15 million estate?
For $15M estate in 2025 (single person): Gross estate: $15,000,000. Less exemption: -$13,990,000. Taxable estate: $1,010,000. Federal tax (40%): $404,000. Effective rate: 2.69% ($404k/$15M). With planning strategies: Use annual gifts ($18k/person/year), charitable deductions, valuation discounts (25-35% for business/real estate), GRAT/QPRT trusts. Result: Could reduce taxable estate below exemption = $0 tax. Married couple: With portability, $15M estate pays $0 federal tax (under $27.98M combined exemption).
What happens to estate tax exemption in 2026?
Major change coming: Current $13.99M exemption (2025) sunsets December 31, 2025. In 2026, reverts to 2017 law: ~$7M per person ($14M married) adjusted for inflation. Impact: Estates $7M-$14M suddenly taxable. $10M estate in 2025: $0 tax. Same $10M estate in 2026: $3M taxable 脳 40% = $1.2M tax. Planning urgency: Use 2025 high exemption before expiration via: Lifetime gifts to trusts, SLATs (Spousal Lifetime Access Trusts), sales to grantor trusts. IRS confirmed: No clawback if use exemption now and law changes. Act by December 31, 2025.