Federal Estate Tax Return

Whether an estate has to pay federal estate tax also depends on the size of the estate, and the nature and extent of any estate planning that was done. If everything is left to a surviving spouse, there is no estate tax because of an unlimited marital deduction.  Estate tax returns must be filed even though no tax is due. If the decedent was not married and the estate exceeds $5,000,000, (2011 and 2012) estate taxes are paid to the federal government.  The current federal estate tax rate is 35%.  Thus if a person dies with an estate of $6,000,000 which is all going to a child, the tax bill would be $350,000.

 

Currently the federal estate tax rules are in a state of uncertainty.  In 2013, the credit goes back to $1,000,000 if Congress does not change the rules.