Are you self-employed?
This includes freelancers and business owners
Estimated Tax Breakup
For $ Annual income
Monthly
Annual
Brackets
Rates
Income
$
Deductions
$
Federal income tax
$
Arizona state income tax
$
FICA tax
$
Self Employment tax
$
Total tax
$
Net pay
$
Marginal and average tax rate
Average tax rate is the effective tax rate that you incur on your income. If your income is $100 with 20% average tax rate and 30% marginal tax rate, you pay $20 in taxes.
Average tax rate is the effective tax rate that you incur on your income. If your income marginal tax rate is the tax rate on the last dollar that you earned. If your income is $100 with 20% average tax rate and 30% marginal tax rate and if you get 1 dollar bonus, you pay 30% tax on that bonus.
Average tax rates measure tax burden, while marginal tax rates measure the impact of taxes on incentives to earn, save, invest, or spend.
W2 employees
Freelancers
W2 employees
Freelancers
How will your net pay increase with increase in your income?
Increment percentage
Increased income
Increased net pay
10%
$
$
25%
$
$
50%
$
$
2X
$
$
3X
$
$
4X
$
$
Summary section
- If you make $ a year living in the region of Arizona, USA, you will be taxed $. That means that your net pay will be $ per year, or $0 per month. Your average tax rate is undefined% and your marginal tax rate is undefined%.
- This marginal tax rate means that your immediate additional income will be taxed at this rate. For instance, an increase of $100 in your salary will be taxed $36.13, hence, your net pay will only increase by $63.87.
Taxes for freelancers vs W-2 employee
The tax system in the US works on a pay-as-you-go basis, so the IRS collects income taxes throughout the year via payroll. Ideally, if you are a W-2 employee, you automatically get your taxes withheld by your employer. However, as a freelancer, taxes aren’t a cakewalk. They have to pay a bit extra in “self-employment tax” to contribute to Social Security and Medicare.
CPA advice for freelancers
If you’re a W-2 employee then most likely, your taxes are already being withheld for you by your employer and you typically get a tax refund. Freelancers, self-employed individuals, and business owners have to handle their own taxes including the quarterly estimated tax payments.
Sounds complicated?
FlyFin can help ease your burden.
With FlyFin you can stay on top of your taxes by paying your quarterly estimated obligations and tracking your business expenses. The A.I. calculates your taxes based on several inputs (your profession & income) and detects all possible deductions which ensures an accurate tax amount.
Tax burden for freelancers vs w2 employees
W2 employees
Freelancers
Freelancers using FlyFin
W2 employees
Freelancers
Freelancers using FlyFin
Income Taxes in Arizona
Taxes vary greatly by state, and each state has its own tax rules and regulations. Taxes are an important factor in determining how much money you get to pocket on the income you earn. The progressive tax rates in Arizona range from 2.59% to 8%. Your tax bracket determines the rate you will pay on your taxable income. Arizona plans a flat tax rate of 2.5% on individual taxpayers for the 2023 tax year, and it will come into effect from April 2024.
Tax Facts
Different Types of State Taxes
Tax Rates for Arizona
State income tax
2.59%-8%
Sales Tax
5.6%-11.2%
Property tax
As per local state
Estate Tax
$0
Tobacco tax
$0.68 per pack
Gasoline tax
$0.18per gallon
Diesel tax
$0.18 per gallon
Who files income taxes in Arizona?
In Arizona, the amount of time you spend living in the state determines the type of resident category you fall into. You will need to file a Arizona state income tax return if you meet at least one of the requirements: Full-time resident: You’re a legal resident and spent the year as a resident, even if you left for a short period of time Part-time resident: A part of the tax year was spent as a resident Non-resident: You don’t live in the state but earn Arizona-source income, or you won a lottery from the state. Corporate entities: Any company that is based in Arizona or make a significant income from the state.
Taxes in Arizona
Income tax rates are relatively moderate in Arizona, and you’ll reach the highest tax bracket once your income reaches $27,272 for single filers and $54,544 for married couples filing jointly. The tax rates do not apply to actual income, but the adjusted gross income or the income after all applicable deductions and exemptions have been subtracted.
Tax brackets for Arizona
Tax brackets function under a progressive tax system. The more money you make, the higher your tax bracket. Your filing status – single, married filing separately (MFS), married filing jointly (MFJ) or head of household (HOH) – also impacts how your income is taxed and the threshold Here are Arizona's state income tax rates for the 2022 tax year: -> For single filers and married people filing individually, the tax rate is 2.59% on the first $27,272 of taxable income. -> The tax rate for married couples filing jointly and surviving spouses is 2.59% on the first $54,545 of taxable revenue. -> 3.34% of taxable income for solo filers and married people filing individually between $27,273 and $54,544. -> 3.34% of all taxable income for married couples filing jointly and surviving partners between $54,546 and $109,089. -> 4.17% of taxable revenue for heads of household and married couples filing jointly between $54,545 and $163,632. -> 4.50% of taxable revenue for heads of household and married couples filing jointly that exceeds $163,632.
Property taxes in Arizona
Owning a property comes with the responsibility of paying property taxes. Property taxes cover costs related to local school districts, police, fire department, parks, sewage systems and the upkeep of roads. In Arizona the property is assessed based on a property’s value and taxes are based on local county and district rates.
Sales taxes in Arizona
Arizona charges a state-wise tax rate of 5.6%, which is relatively low. The district or county tax rates in Arizona are added to this rate and the combined taxes can be as high as 11.2%.
Other taxes in Arizona
There are a number of other taxes that a state can charge and Arizona is no different. The state charges taxes on inheritance, tobacco, gasoline and alcohol. The taxes and tax rates vary by state.
Estate taxes in Arizona
The state of Arizona does not charge a tax for estate or inheritance taxes. The state also doesn’t charge a tax on gifts.
Tobacco taxes in Arizona
The tobacco tax is levied in most states to discourage the number of people buying cigarettes. In Arizona, the tax rate is $2.00 per pack of 20 cigarettes. Cigars are taxed at $0.218 per cigar and the same $0.223 applies to wholesalers’ cost of chewing tobacco and smoking tobacco.
Gasoline taxes in Arizona
Arizona’s gasoline and diesel taxes are $0.18 per gallon for gasoline and $0.18 or $ per gallon for diesel.
Alcohol taxes in Arizona
There are taxes levied on alcohol in an effort for states to raise capital and encourage individuals to lower their overall consumption. In Arizona, alcohol tax for beer is at 16 cents per gallon, tax for wine is $82 cents per gallon and distilled spirits are taxed at $3.00 per gallon.
