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How High is the Federal Estate Tax Rate?

How High is the Federal Estate Tax Rate?



Bad news – it’s 40 percent. 

The good news is that the first $12,060,000 per person is exempt from federal estate tax in 2022. 

In 2023, that amount goes up to $12,920,000, again, per person. 

If you are a married couple, you could double those amounts. So, if you are a married couple worth more than $27,000,000, then yes, that last million dollars will be taxed at a 40% rate. 

Look on the bright side, $400,000 of tax out of $27 million dollars, while no one likes to pay tax, that’s a one-and-a-half percent effective rate. I’m okay with that. 

The other thing is if you have that much money, there are all sorts of things you can do to reduce your taxable estate. All sorts of things. If you have those issues, give us a call. 267-573-1019. If you don’t have those issues, give us a call anyway because almost nobody has those issues. 

Mike Garry

Author Mike Garry

Michael Garry is a CERTIFIED FINANCIAL PLANNER™ practitioner and a NAPFA-registered Financial Advisor. He is a member of the National Association of Personal Financial Advisors (NAPFA) and the Financial Planning Association (FPA).

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