How much federal estate tax could your estate owe?

What is the federal estate tax exemption?

The federal estate tax exemption is the amount an estate can pass to heirs before any federal estate tax applies at all. For 2024 that exemption is $13,610,000 per person, and it's indexed for inflation most years. Only the portion of an estate's value above the exemption is potentially subject to tax — the exemption itself is never taxed.

Does my state also have an estate tax?

Several states levy their own estate or inheritance tax with exemption thresholds far below the federal level — in some states as low as $1 million. This calculator covers federal estate tax only. If you live in or own property in a state with its own estate or inheritance tax, check that state's specific rules separately, since they can apply even to estates well under the federal exemption.

How can estates reduce estate tax exposure?

Common planning strategies include making lifetime gifts under the annual gift tax exclusion, setting up irrevocable trusts, making charitable bequests, and holding life insurance outside the taxable estate. Which strategy makes sense — if any — depends heavily on individual family circumstances, so this is a general note rather than a recommendation: work with a qualified estate planning attorney or tax professional before acting.

Is inheritance taxed to the recipient too?

No — there is no federal inheritance tax paid by the person who receives assets from an estate. Any federal estate tax owed is paid by the estate itself, before assets are distributed to heirs. A handful of states impose a separate inheritance tax directly on recipients, which is a distinct tax from estate tax and follows its own rules.

Worked example: a $20,000,000 gross estate against the 2024 federal exemption of $13,610,000 leaves a taxable estate of $6,390,000. At a flat 40% top-rate simplification, that's an estimated $2,556,000 in federal estate tax, leaving $17,444,000 to heirs. In reality, federal estate tax uses graduated brackets from 18% to 40%, but at estate sizes well above the exemption, the effective rate clusters close to the top bracket — which is why this calculator uses a flat top-rate simplification rather than modeling every bracket.