Estimate your combined Arizona state (2.5%) and federal self-employment tax as a freelancer or 1099 contractor. Plan to set aside roughly 30-35% of net income.
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Get Matched with a CPA →Arizona has a flat income tax rate of 2.5%, one of the lowest in the nation among states with an income tax. This recent reduction from a graduated system makes Arizona very attractive for freelancers. Combined with a reasonable cost of living in many areas, Arizona freelancers keep a larger share of their earnings.
Arizona freelancers should factor in the 2.5% state income tax when planning their tax payments. This is in addition to the 15.3% federal self-employment tax and federal income tax based on your bracket.
All self-employed individuals in Arizona must make quarterly estimated tax payments to the IRS if they expect to owe $1,000 or more. Arizona may also require separate state estimated tax payments — check with a local CPA. Our calculator above gives you the exact quarterly amounts based on your income.
Based on the 2.5% state rate in Arizona, we recommend setting aside approximately 30-35% of your net self-employment income for taxes. This covers federal income tax, self-employment tax (15.3%), and Arizona state income tax.
The exact percentage varies based on your total income, filing status, and deductions. Use the calculator above for a personalized estimate, then set up automatic transfers to a dedicated tax savings account each time you receive a payment.
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