Estate Tax Calculator vs Gift Tax Calculator

The federal estate tax exemption for 2024 is $13.61 million per individual ($27.22 million for married couples). Only estates exceeding this amount owe federal estate tax. The exemption is scheduled to drop to about $7 million in 2026 unless Congress extends it.

Federal estate tax rates are progressive, ranging from 18% to 40%. The top rate of 40% applies to taxable estates over $1 million above the exemption amount. Most taxable estates pay close to the 40% rate due to the progressive bracket structure.

For 2024, you can give up to $18,000 per recipient per year without filing a gift tax return or using your lifetime exemption. Married couples can combine exclusions to give $36,000 per recipient. Medical and educational payments made directly to institutions are unlimited and don't count.

Not necessarily. Gifts exceeding the annual exclusion reduce your lifetime gift and estate tax exemption ($13.61 million in 2024). You only pay gift tax once you've used up your entire lifetime exemption. Most people never pay gift tax due to this high exemption.