What is the Arizona income tax rate for self-employed people in 2026?

Arizona uses a flat 2.5% individual income tax rate, so self-employment profit is taxed at 2.5% after Arizona's standard deduction, which matches the federal amount.

Do Arizona freelancers pay state quarterly estimates?

Yes, if you expect to owe $1,000 or more of Arizona tax. File Form 140ES on the same April, June, September, and January schedule as federal 1040-ES payments.

How much should an Arizona 1099 worker set aside?

Most Arizona gig workers land between 22% and 28% of net profit once federal income tax, 15.3% SE tax, and the flat 2.5% state tax are combined.

Does Phoenix or Tucson add a local income tax?

No Arizona city levies a personal income tax. Cities do charge transaction privilege (sales) tax on certain business activity, which is separate from income tax.

Is Arizona mileage deducted at the federal rate?

Yes. Arizona starts from federal adjusted gross income, so the $0.76 per business mile standard rate for 2026 flows straight through to your state return.

Do I need an Arizona TPT license as a freelancer?

Only if you sell taxable goods or certain taxable services. Pure service work such as writing, driving, or consulting generally does not require a transaction privilege tax license.

Arizona Self-Employed Tax Calculator

Federal + 15.3% SE + Arizona flat 2.5% state income tax on 2026 1099 income for Arizona residents.

Arizona taxes every dollar of self-employment profit at a flat 2.5%, one of the lowest income tax rates in the country. That keeps the state slice small — the federal income tax and the 15.3% self-employment tax do most of the damage, and mileage is usually the deduction that decides your year.

Self-employed income & expenses

Estimate federal + SE + state tax for the 2026 tax year in one pass.

Annual 1099 income

Business miles driven

Other business expenses

Self-employed health insurance

Retirement contributions (SEP / Solo 401k)

W-2 income (if any)

Federal tax withheld

Filing status

State

Estimated total tax bill

$11,612

Refund / owed

-$11,612

Effective rate

19.4%

Detailed breakdown

Mileage deduction$6,080

Total business expenses$8,580

Net self-employment income$51,420

Self-employment tax (15.3%)$7,265

½ SE deduction (above-the-line)$3,633

Adjusted gross income$47,787

Taxable income$31,687

Federal income tax$3,554

State tax (est.)$792

Quarterly estimated payment$2,748

Marginal rate14.5%

Arizona city tax rates for self-employed workers (2026)

Arizona charges a flat 2.5% state income tax and no city income tax, but Phoenix, Tucson, and most other cities levy their own transaction privilege (sales) tax on taxable goods and some services.

Local and state tax rates for self-employed residents of major Arizona cities in 2026
City	Local rate	State rate	What gig workers should know
Phoenix	2.3% city TPT (no income tax)	2.5% flat state	TPT license needed if you sell taxable goods or rent property; service-only gig work usually exempt.
Tucson	2.6% city TPT	2.5% flat state	Combined state + county + city TPT can exceed 8.7% on taxable sales.
Mesa	2.0% city TPT	2.5% flat state	No local income tax; TPT applies to retail and rentals.
Scottsdale	1.75% city TPT	2.5% flat state	Short-term rental hosts must license and remit city TPT.
Chandler	1.5% city TPT	2.5% flat state	Service income is not TPT-taxable; profit still hits the 2.5% state rate.

Arizona local and state filing deadlines

Q1 AZ Form 140ESApril 15, 2026
25% of expected Arizona tax at the flat 2.5% rate.
Q2 AZ Form 140ESJune 15, 2026
Second installment.
Q3 AZ Form 140ESSeptember 15, 2026
Third installment.
Q4 AZ Form 140ESJanuary 15, 2027
Final 2026 installment.
AZ Form 140 returnApril 15, 2027
Extension to October 15, 2027 to file, not to pay.
Monthly/quarterly TPT return20th of the following month
Only if you hold a TPT license for taxable sales or rentals.
Q1 federal 1040-ESApril 15, 2026
Covers income earned January 1 – March 31.
Q2 federal 1040-ESJune 15, 2026
Covers April 1 – May 31.
Q3 federal 1040-ESSeptember 15, 2026
Covers June 1 – August 31.
Q4 federal 1040-ESJanuary 15, 2027
Covers September 1 – December 31.

Arizona estimates are required when you expect to owe $1,000 or more of state tax.
Arizona's standard deduction matches the federal amount, so most gig workers see a small effective state bill.

See every Arizona tax form you need to file — annual, quarterly, and local →

Frequently asked questions

What is the Arizona income tax rate for self-employed people in 2026?: Arizona uses a flat 2.5% individual income tax rate, so self-employment profit is taxed at 2.5% after Arizona's standard deduction, which matches the federal amount.
Do Arizona freelancers pay state quarterly estimates?: Yes, if you expect to owe $1,000 or more of Arizona tax. File Form 140ES on the same April, June, September, and January schedule as federal 1040-ES payments.
How much should an Arizona 1099 worker set aside?: Most Arizona gig workers land between 22% and 28% of net profit once federal income tax, 15.3% SE tax, and the flat 2.5% state tax are combined.
Does Phoenix or Tucson add a local income tax?: No Arizona city levies a personal income tax. Cities do charge transaction privilege (sales) tax on certain business activity, which is separate from income tax.
Is Arizona mileage deducted at the federal rate?: Yes. Arizona starts from federal adjusted gross income, so the $0.76 per business mile standard rate for 2026 flows straight through to your state return.
Do I need an Arizona TPT license as a freelancer?: Only if you sell taxable goods or certain taxable services. Pure service work such as writing, driving, or consulting generally does not require a transaction privilege tax license.