Inheritance and Estate Taxes in the United States (Federal and State)
In the United States, the main tax on wealth transfers at death is the federal estate tax. It applies to the total value of a decedent’s estate before distribution to heirs. For 2025, the federal estate tax exemption is about 13.99 million dollars per individual, nearly 28 million dollars for married couples. The top federal rate is 40 percent, but in practice only a very small percentage of estates exceed the exemption. Details on exemptions, rates, and filing requirements can be found directly on the Internal Revenue Service website.
At the state level, rules vary. Most states do not impose death taxes, but a handful still do. Estate taxes are levied on the value of the estate before distribution, while inheritance taxes are charged to the beneficiaries. Only six states still impose an inheritance tax, and Maryland is unique in applying both an estate and inheritance tax. For a comprehensive overview of state-level rules, see the US State Inheritance and Estate Tax Guide. For federal estate tax planning and calculations, you can refer to the US Federal Estate Tax Guide and use the US Federal Estate Tax Calculator.
Wealth Taxes in the United States
The United States does not levy a federal wealth tax. Individuals are not taxed annually on their total net worth, such as shares, businesses, or real estate. While there are occasional political debates about introducing a wealth tax on ultra-high-net-worth individuals, no such tax exists at the federal level. Similarly, no state imposes a general wealth tax. Instead, the tax system relies on other instruments such as income tax, capital gains tax, and estate tax to generate revenue from wealth.
Property Taxes in the United States
Property taxes are a central and recurring part of the U.S. tax system. They are assessed and collected locally, usually by counties or municipalities, and are based on the assessed value of land and real estate. Rates vary widely between jurisdictions, typically from under 0.5 percent to over 2 percent of the property’s assessed value. The revenue finances local services such as schools, infrastructure, police, and fire departments. Property tax obligations apply to nearly all property owners, and failure to pay can result in penalties, liens, or even foreclosure.