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What to Know About the Georgia Estate Tax

There is no estate tax in Georgia. If you’re estate planning, there are still other factors to consider, like the possibility of having to pay the federal estate tax. If you’re dealing with an estate or with any other financial planning situation, you might want to consider finding a financial advisor to help you. SmartAsset can help you find a financial advisor in your area.

Georgia Estate Tax

Georgis is one of 38 states with no estate tax.

What Is the Estate Tax?

The estate tax is a tax levied by the federal government and some local governments on the estate of a recently deceased person. It is sometimes called the “death tax.” The estate tax is applied before the people inheriting the money receive it.

The estate tax is different from the inheritance tax. Inheritance taxes are applied to a person’s heirs after they have already received money from someone who recently died.

Georgia Inheritance Tax and Gift Tax

What to Know About the Georgia Estate Tax

There is no inheritance tax in Georgia. Another state’s inheritance tax could still apply to Georgia residents, though. For instance, in Pennsylvania, the inheritance tax applies to heirs who live out of state if the decedent lives in the Keystone State. Check local laws to see if this might apply to you.

Georgia also has no gift tax. The federal gift tax only applies on gifts of more than $14,000 in 2017 and $15,000 in 2018.

Federal Estate Tax

Even though there is no state estate tax in Georgia, you may still owe money to the federal government. The federal estate tax exemption is $11.18 million in 2018. This tax is portable for married couples, meaning that if the right legal steps are taken a married couple’s estate won’t have to pay a tax on up to $22.36 million when both spouses die.

If an estate tax exceeds that amount, the top federal tax rate is 40%. A full chart of federal estate tax rates is below.

Here’s an example of how it works: Let’s say your estate is worth $14 million and you aren’t married. Subtracting the exemption of $11.18 million, leaves you with a taxable estate of $2.82 million. Consulting the chart, you are in the highest bracket. Your base payment on the first $1 million is $345,800. You also pay 40% on the remaining $1.82 million, which comes to $728,000. That, plus the base of $345,800, means your total federal estate tax burden is $1.0738 million.

FEDERAL ESTATE TAX RATES
Taxable Estate* Base Taxes Paid Marginal Rate Rate Threshold**
$1 – $10,000 $0 18% $1
$10,000 – $20,000 $1,800 20% $10,000
$20,000 – $40,000 $3,800 22% $20,000
$40,000 – $60,000 $8,200 24% $40,000
$60,000 – $80,000 $13,000 26% $60,000
$80,000 – $100,000 $18,200 28% $80,000
$100,000 – $150,000 $23,800 30% $100,000
$150,000 – $250,000 $38,800 32% $150,000
$250,000 – $500,000 $70,800 34% $250,000
$500,000 – $750,000 $155,800 37% $500,000
$750,000 – $1 million $248,300 39% $750,000
Over $1 million $345,800 40% $1 million

*The taxable estate is the total above the federal exemption of $11.18 million.
**The rate threshold is the point at which the marginal estate tax rate kicks in.

Overall Georgia Tax Picture

What to Know About the Georgia Estate Tax

The state income tax rates in Georgia ranges from 1% to 6%. That’s the 20th-highest top tax rate and the 15th-lowest bottom tax rate. You can use our Georgia paycheck calculator to figure out your take home pay. The Peach State is very tax-friendly for retirees. Pension plans and retirement plans are only partially taxed and Social Security is not taxed.

The state also has relatively low property taxes. The average effective property tax rate in Georgia is just 0.93%, below the national average.

Resources for Estate Tax Help

  • Planning an estate is a lot of work, and it can be overwhelming. If you think you need expert help with this or any other financial planning situation, turning to a financial professional can be a great solution. A financial advisor can help you navigate your financial life and set everything up for you. SmartAsset can help you find the right advisor for you. SmartAdvisor is our free financial advisor matching service. Here’s how it works: You start the process by answer a series of questions about yourself and your finances and then our program will match you with up to three advisors in your area. The advisors will get in touch with you to see if you want to work with them. All of the advisors on our platform are free of disclosures and have been fully vetted.
  • It’s important to know how much money you have saved for retirement so you know what your estate might look like. Use our retirement calculator to see what your savings may look like as you approach retirement.
  • No matter what age you are, planning your estate is a vital step. Even if you’re years away from thinking about retirement, planning your estate will give you peace of mind in case something unfortunate happens.

Photo credit: ©iStock.com/DragonImages, SmartAsset, ©iStock.com/Derek Brumby

Ben Geier, CEPF® Ben Geier is an experienced financial writer currently serving as a retirement and investing expert at SmartAsset. His work has appeared on Fortune, Mic.com and CNNMoney. Ben is a graduate of Northwestern University and a part-time student at the City University of New York Graduate Center. He is a member of the Society for Advancing Business Editing and Writing and a Certified Educator in Personal Finance (CEPF®). When he isn’t helping people understand their finances, Ben likes watching hockey, listening to music and experimenting in the kitchen. Originally from Alexandria, VA, he now lives in Brooklyn with his wife.
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