2025 Estate and Gift Tax Update
| Here’s a summary of the federal estate tax rates in 2025: The federal estate tax has a top rate of 40%. However, the tax only applies to the portion of an estate that exceeds the exemption amount. For individuals passing away in 2025, the estate tax exemption amount is $13.99 million. Married couples can combine their exemptions to shield $27.98 million from federal estate tax. Here’s a breakdown of the marginal federal estate tax rates in 2025: Taxable Estate Amount (Exceeding Exemption) Tax Rate What You Pay $250,001 – $500,000 34% $70,800 base tax + 34% on taxable amount $500,001 – $750,000 37% $155,800 base tax + 37% on taxable amount $750,001 – $1 million 39% $248,300 base tax + 39% on taxable amount More than $1 million 40% $345,800 base tax + 40% on taxable amount Important Note: The current estate and gift tax exemptions are scheduled to sunset at the end of 2025, potentially reverting to lower amounts adjusted for inflation unless Congress takes action to extend them. Investopedia |
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