Calculate federal and state estate taxes on your legacy
Real estate, investments, retirement accounts, life insurance
Mortgages, loans, credit card debt
Some states have additional estate taxes
Fully deductible from estate
Gifts above annual exclusion ($19,000/year)
The estate tax is a federal tax on the transfer of assets from deceased individuals to their heirs. It's sometimes called the "death tax" and applies to estates exceeding the federal exemption amount.
The tax is calculated on the fair market value of all assets owned at death, minus allowable deductions such as debts, charitable bequests, and transfers to a surviving spouse.
Exemption: $13,990,000
Combined Exemption: $27,980,000
Graduated rates from 18% to 40% on taxable amounts above the exemption. The maximum 40% rate applies to amounts over $1 million above the exemption.
In addition to federal estate tax, some states impose their own estate or inheritance taxes. These states typically have lower exemption thresholds than the federal government.
Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and Washington D.C.
Transfers to a surviving spouse are completely exempt from estate tax. Additionally, the unused portion of the deceased spouse's exemption can be transferred to the surviving spouse (called "portability").
This allows married couples to effectively use up to $27,980,000 in combined exemptions.
The estate and gift tax systems are unified. Large gifts made during your lifetime count against your estate tax exemption.
You can give up to $19,000 per recipient per year without using your lifetime exemption or filing a gift tax return.
Gifts above the annual exclusion reduce your available estate tax exemption at death.