Estate Tax - Tool
How the Estate Tax Calculator Works
1) Start with Gross Estate
Enter the total estate value (cash, brokerage, retirement accounts, real estate, closely held business interests, etc.). This mirrors the gross-estate concept in federal rules used to prepare an estate tax return.
Why it matters: The gross estate sets the baseline for deductions and exemptions; precision here makes all later numbers more meaningful.
2) Subtract Debts & Expenses
Input mortgages, documented personal liabilities, and typical administration costs. The calculator treats these as deductions (consistent with Form 706 schedules for funeral/admin expenses and claims against the estate).
So what? For large estates, documenting debts and fees can change bracket placement and the impact of state thresholds.
3) Add State of Residence and Marital Status
Select the state to determine whether a separate state estate or inheritance tax might apply and at what level, then choose single or married to reflect eligibility for the unlimited marital deduction and potential portability. Under federal law, the marital deduction generally allows transfers to a US-citizen spouse to pass estate-tax-free, and portability lets a surviving spouse use any unused exclusion of the deceased spouse if a timely election is made on Form 706.
4) Optional Details That Improve Accuracy
- Heirs / other heirs: helps display per-heir context (not a tax factor by itself).
- Charitable bequests: the calculator nets out charitable transfers before tax under the charitable-deduction rules.
- Lifetime gifts (taxable): prior taxable gifts reduce the remaining federal exclusion (the federal system is unified for gift and estate tax).
- Insurance held in trust: death benefits owned by an irrevocable life insurance trust (ILIT) are typically excluded from the insured’s gross estate; that’s reflected when toggled. (Specific facts control.)
- Growth projection: applies a simple compounding rate to show a future net-of-tax picture, useful for multi-year planning.
What the Output Shows
A) Stacked bars - Gross → Debts → Charity → Taxable → Tax → After-tax to heirs
A single visual answers the practical question, “What’s left for heirs?” The bar chart walks left-to-right through the calculation, ending with a dollar estimate of after-tax value.
B) Federal estimate
The federal calculation applies the 2025 exclusion and rate schedule. The tool subtracts the $13.99M exclusion (per person) and then applies current law rates up to 40% on amounts above the exclusion (educational simplification of a progressive schedule).
C) State estimate
Some states levy estate or inheritance taxes with their own thresholds and top rates. If the selected state has no such tax, the state result is $0; if it does, the calculator applies that state’s framework at a high level to show potential impact. Always confirm with state guidance, since exemptions and “cliff” rules vary.
D) Scenario cards
- Spouse passes now: shows an immediate view assuming today’s facts.
- Portability in place: illustrates that preserving the deceased spouse’s unused exclusion can shield more later.
- Projected 10/20/30 years: compounds the estate and reruns the estimate so families can see whether growth may push them into taxable territory.
Practical Ways to Use the Results (Educational Only)
- File for portability when appropriate. Even if no tax is due when the first spouse dies, electing portability on a timely Form 706 can preserve millions of future exclusion for the survivor.
- Right-size state exposure. If the state estimate appears material, consider legal strategies often discussed with estate counsel (e.g., titling reviews, charitable bequests, or gifting programs). State rules change; rely on the latest state guidance.
- Document debts and expenses. Accurate records strengthen deductions the IRS recognizes on an estate tax return.
- Coordinate beneficiary designations and trusts. Trusts, ILITs, and account titling can change what’s in the taxable estate and who files. Form, timing, and ownership details matter.
This interactive estate tax calculator is designed solely for educational and illustrative purposes. It uses simplified assumptions to demonstrate potential estate tax outcomes based on user-provided inputs. Results are hypothetical and do not reflect actual tax liabilities or legal determinations.
The tool assumes static federal and state exemption thresholds, ignores potential legislative changes, and does not account for factors such as trust structures, asset liquidity, valuation discounts, or the timing of lifetime gifts. Actual estate tax outcomes will vary based on future laws, asset performance, residency status, and personal circumstances.
This calculator does not constitute financial, tax, or legal advice. Users should confirm all assumptions and results with a qualified estate attorney or tax professional before making planning decisions.
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