Great tax planning by living in a no tax state 🙂
1. Your calculation of 37% is correct. No simple way of figuring in the standard deduction and child care credit as they will reduce your federal income tax liability but NOT your SS and Medicare liabilities. I generally consider any refund of those amounts to be a bonus to the self employed taxpayer, but theoretically you can divide those deductions and credits by 4 and apply the amount of income for federal income tax purposes only.
As for the second part of your question, the IRS considers all of your income to be received equally throughout the 4 quarters. So if you underpay for Q3 and make up the difference in Q4, you may still receive an underpayment penalty, even if you are due a refund on your return. That being said, there is a section in the Other Tax Situations section of TurboTax regarding Underpayment Penalties that you can show the IRS when your income was received throughout the year. For example, a lawn care maintenance company might show little to no income in Q1, lots in Q2 and Q3, and less in Q4. However, if the IRS decides to audit you based on how you reported income received, you need detailed records of how you calculated the income received for each quarter.
2. The safe harbor method of paying 110% of your prior year liability will avoid any underpayment penalty according to my resources, which I guess is why they call it the safe harbor method!
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