Planning for the future or managing a loved one’s estate can be overwhelming. One of the most common questions we get is, “Will we owe estate taxes?” If you live in Iowa, good news—Iowa no longer has an estate tax or inheritance tax as of January 1, 2025. So your estate won’t owe anything to the state, no matter what.
But that doesn’t mean you’re completely off the hook. If the estate is big enough, the federal government may still want a tax payment. That’s where this calculator comes in. It helps you figure out if the estate will owe federal estate taxes and if so, how much.
To use the calculator, enter the Total Estate Value. This is everything the person owned when they passed away—homes, bank accounts, retirement savings, investments, personal belongings, even vehicles. Then enter any Debts and Liabilities still owed, like mortgages, personal loans or medical bills. These reduce the value of the estate for tax purposes.
Next, enter any Charitable Contributions made by the person. Donations to qualified charities are deductible and won’t count towards the taxable estate. Also, any assets left to a surviving spouse are not taxed under the Marital Deduction so you can add that in too.
The calculator also asks for the Federal Exemption Amount. For most people in 2024 that’s $13.92 million. This is the threshold for federal estate taxes. If the estate is smaller than the exemption, no federal tax is due. If it’s larger, the excess is taxed at 40%.
Once you’ve entered all the numbers hit the “Calculate” button. The calculator will show the estimated federal estate tax owed. It will also remind you that no Iowa estate or inheritance tax applies.
This tool will give you peace of mind whether you’re in the early stages of estate planning or managing the details after a loved one has passed. It’s not a substitute for legal advice but can help you understand what to expect and when you should talk to an attorney.Not sure about the size of the estate, how to value assets or if there are deductions? Contact O’Flaherty Law and we’ll walk you through it.
Estate planning or Iowa taxes? Call today.
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