Starting an LLC as a solo founder in Arizona offers significant benefits, but understanding the tax landscape is crucial. This guide breaks down federal and Arizona-specific tax obligations for your single-member LLC in 2026, helping you minimize liabilities and maximize your bottom line. If you're exploring this further, our guide on LLC registration in Arizona is a helpful next step. Using AI-powered platforms like Lovie can further streamline these processes.
As a single-member LLC in Arizona, your default tax structure is a 'pass-through' entity. This means your business profits are passed through to your personal income and taxed at the individual level. While simpler than corporate taxation, it's vital to understand both federal and Arizona-specific taxes. For a deeper dive, see our resource on setting up your Arizona LLC. You can also elect to be taxed as an S-Corp for potential tax savings, but this adds complexity. Lovie can help you determine the optimal tax structure and manage the associated filings.
Single-member LLCs pay self-employment tax (15.3%) plus income tax on all net profits, reported on Schedule C of the owner's personal tax return.
If you use a portion of your home exclusively and regularly for business, you can deduct expenses like rent, utilities, and mortgage interest.
Deduct ordinary and necessary expenses related to your business, such as supplies, travel, advertising, and professional fees. You can deduct one-half of your self-employment tax from your gross income.
Pay estimated federal income tax and self-employment tax.
Pay estimated Arizona income tax. File and pay Arizona TPT.
Start your formation with Lovie — $499 one-time, state filing fee included.
State-specific formation guides, cost breakdowns, compliance checklists, and expert comparisons — updated for 2026.