Quick answer: An estate of $16,000,000 with $500,000 of deductions and no taxable gifts is $1,510,000 over the 2025 exemption of $13,990,000 and owes $604,000 of federal estate tax (40% of the excess).
How it's calculated
Taxable estate = gross estate (everything owned at death at market value, including life insurance you owned and retirement accounts) − deductions (debts, funeral and administration costs, everything left to a US-citizen spouse, gifts to charity).
The tax is the rate schedule (18% rising to 40% above $1 million) applied to the taxable estate plus lifetime taxable gifts, minus the unified credit, which equals the tax on the exemption: $13,990,000 for 2025. In practice every dollar above the exemption is taxed at 40%.
A surviving spouse can add the late spouse's unused exemption (portability) if it was elected on the late spouse's estate tax return; enter the total in the exemption field. Under the One Big Beautiful Bill Act the exemption is $15 million for deaths in 2026, indexed after that.
Worked examples
- $16,000,000 − $500,000 deductions: (15,500,000 − 13,990,000) × 40% = $604,000
- $10,000,000 estate: below the exemption → $0
Frequently asked questions
Who has to pay US estate tax?
Estates of US citizens and residents above the exemption. Non-resident non-citizens are taxed only on US-situated assets (such as US real estate and shares) with an exemption of just $60,000.
Do lifetime gifts use up the exemption?
Yes. Gifts above the yearly gift exclusion ($19,000 per recipient in 2025) are added back at death and use the same exemption.
Is inheritance taxed in the Gulf?
Saudi Arabia and the UAE have no inheritance or estate tax; estates are divided by Sharia or applicable law.
Is money left to a spouse taxed?
Generally not, if the spouse is a US citizen, because of the unlimited marital deduction. Different rules apply to a spouse who isn't a citizen.
Do states charge estate tax too?
Some do, often with much lower exemptions than the federal one, and a few charge inheritance tax. This calculator covers only the federal tax.
Do non-US citizens owe US estate tax?
They can, on US assets such as US property and shares. People who aren't US residents have a far smaller exemption, of only $60,000.