Arizona Side Hustle Tax Set-Aside Calculator

Who this calculator is for

It's for Arizona residents who earn side income as a sole proprietor or single-member LLC (reported on Schedule C), such as freelancing, delivery, cleaning, pet sitting, or selling online, and who want a quick number to move into a tax savings account. It works whether or not you also have a W-2 job.

It's not built for S-corporations, partnerships, part-year residents, people with income in several states, or anyone who needs an exact figure for filing. For those, use tax software or a professional.

How the estimate works

Here is every step the calculator takes, so you can check it or do it by hand:

Assumptions and limits

• All profit is net self-employment income. Some income, including many rentals, isn't subject to self-employment tax. Ask a tax pro how yours is treated.
• The whole profit is taxed at the one federal bracket you choose. If your profit pushes you into a higher bracket, part of it is taxed at the higher rate, so pick the higher bracket to be safe.
• It leaves out the QBI deduction, the standard deduction, credits, and other income or losses. Those usually lower the real bill, so this estimate tends to run on the safe side, but not always.
• It does not include Arizona TPT, city taxes, or any tax you've already paid through withholding or estimates.
• Quarterly = total ÷ 4. If your income is uneven, the IRS annualized installment method (Form 2210) may let you pay less in slow quarters.

Worked example (hypothetical numbers)

These numbers are made up to show the math. They aren't a prediction of what any side hustle earns.

Say you're single, have no W-2 job, expect $20,000 of side hustle profit in 2026, and pick the 12% federal bracket.

• Net earnings: $20,000 × 92.35% = $18,470.00
• Self-employment tax: $18,470.00 × 15.3% = $2,826 (Social Security $2,290 + Medicare $536)
• Half-of-SE-tax deduction: $1,413, so income taxes apply to about $18,587
• Federal income tax at 12%: $2,230
• Arizona income tax at 2.5%: $465
• Total set-aside: about $5,521, or 27.6% of profit, which is about $1,380 per quarter

If the same person also had a W-2 job paying more than $184,500, the 12.4% Social Security portion would drop to $0, and only the 2.9% Medicare portion would apply to the side income.

How to actually set the money aside

1. Open a separate savings account and name it "Taxes." Keeping it apart from spending money is most of the battle.
2. Move your percentage every time you get paid. Use the "share of profit" number above. If your expenses are steady, applying it to each deposit is close enough.
3. Put 100% of any TPT you collect in the same account or a separate one. That money was never yours.
4. Re-run the calculator each quarter with your updated profit, and raise or lower your percentage.

Our Side Hustle Taxes in Arizona guide has the full set-aside checklist, including what to do every month, every quarter, and every January.

Quarterly estimated taxes: the basics

• Who has to pay: The IRS says individuals, including sole proprietors, generally have to make estimated payments if they expect to owe $1,000 or more when they file. (IRS, Estimated taxes)
• Avoiding the penalty: Most people avoid the underpayment penalty if they paid at least 90% of this year's tax or 100% of last year's tax, whichever is smaller. If last year's AGI was over $150,000 ($75,000 married filing separately), the prior-year figure is 110%. (IRS; Form 1040-ES)
• Have a W-2 job? You can skip quarterly payments by having your employer withhold more. File a new Form W-4 and use the line for extra withholding.
• Due dates: The year is split into four payment periods. Confirm each year's dates on the current Form 1040-ES. You can pay through IRS Direct Pay.
• Arizona: Arizona estimated payments (Form 140ES) are required only if your Arizona gross income was more than $75,000 ($150,000 married filing jointly) in both the prior year and the current year. See the 2026 Form 140ES instructions.

Frequently asked questions

How much should I set aside for taxes on a side hustle in Arizona?

It depends on your profit, your other income, and your federal tax bracket. Self-employment tax alone is about 14.1% of profit (15.3% of 92.35%) until you reach the Social Security wage base. Federal income tax at your bracket and Arizona income tax (2.5% for tax year 2025) come on top. Many people end up somewhere around 25% to 30% of profit, but use the calculator above for your own estimate.

Does Arizona have a self-employment tax?

No. Arizona has no separate state self-employment tax. Self-employment tax (Social Security and Medicare) is federal. Arizona taxes your side hustle profit through its regular flat individual income tax, which was 2.5% for tax year 2025. Confirm the 2026 rate with the Arizona Department of Revenue.

Do I have to make quarterly estimated tax payments?

The IRS says individuals, including sole proprietors, generally have to make estimated payments if they expect to owe $1,000 or more when they file. If you have a W-2 job, you can instead ask your employer to withhold more by filing a new Form W-4. Arizona estimated payments (Form 140ES) are required only above certain income levels; see the Form 140ES instructions.

Does this calculator include Arizona TPT?

No. Transaction Privilege Tax (TPT) is a separate tax on certain sales and rentals, and it is not income tax. If you collect TPT, set aside 100% of it on top of the amount shown here. Our TPT guide explains who needs a license.

Why does the calculator ask about my W-2 wages?

Two reasons. Your W-2 wages count toward the 2026 Social Security wage base ($184,500) first, so high earners pay less of the 12.4% Social Security portion on side income. Wages also count toward the Additional Medicare Tax threshold. Your wages also affect your federal tax bracket, which you choose yourself.