User is not authorized to perform: cloudformation:CreateStack

The closest one that you've mentioned is AWSCloudFormationReadOnlyAccess, but obviously that's for readonly and you need cloudformation:CreateStack. Add the following as a user policy.

{
    "Version": "2012-10-17",
    "Statement": [
        {
            "Sid": "Stmt1449904348000",
            "Effect": "Allow",
            "Action": [
                "cloudformation:CreateStack"
            ],
            "Resource": [
                "*"
            ]
        }
    ]
}

It's entirely possible you'll need more permissions- for instance, to launch an EC2 instance, to (re)configure security groups, etc.

What @tedder42 said, but I also had to add the following to my group policy before I could deploy to lambda from inside visual studio.

{
    "Version": "2012-10-17",
    "Statement": [
        {
            "Sid": "Stmt1449904348000",
            "Effect": "Allow",
            "Action": [
                "cloudformation:CreateStack",
                "cloudformation:CreateChangeSet",
                "cloudformation:ListStacks",
                "cloudformation:UpdateStack",
                "cloudformation:DescribeChangeSet",
                "cloudformation:ExecuteChangeSet"
            ],
            "Resource": [
                "*"
            ]
        }
    ]
}

In my recent experience the policy required was

{
    "Version": "2012-10-17",
    "Statement": [
        {
            "Sid": "Stmt1449904348000",
            "Effect": "Allow",
            "Action": [
                "cloudformation:CreateStack",
                "cloudformation:CreateChangeSet",
                "cloudformation:ListStacks",
                "cloudformation:UpdateStack",
                "cloudformation:DescribeStacks",
                "cloudformation:DescribeStackResource",
                "cloudformation:DescribeStackEvents",
                "cloudformation:ValidateTemplate",
                "cloudformation:DescribeChangeSet",
                "cloudformation:ExecuteChangeSet"
            ],
            "Resource": [
                "*"
            ]
        }
    ]
}