FAQ – Tax Preparation for Individuals, Landlords, and 1099 Workers in New Hampshire (Tax tips for NH landlords)

Tax season hits differently when you live in New Hampshire. We do things ourselves here. We ask smart questions. We look out for our families and our small businesses. And we expect straight answers without a lot of noise. That is exactly why I built Thrive-Tax. Every return that comes through my door belongs to someone in this community. A landlord in Sunapee is trying to stay ahead of repairs. A contractor in New London is juggling 1099s from three different clients. A family sorting through W-2s, childcare expenses, and a stack of receipts that grew all year.

A Multifamily home in the White Mountains

I wrote this FAQ because the same questions come up again and again across the Lake Sunapee and Kearsarge region. People want clarity. They want to know what the IRS expects, what New Hampshire actually cares about, and how to avoid surprises. If you are a landlord, a sole proprietor, or someone juggling self-employment income here in NH, these are the answers you keep wishing someone would give you. My goal is to make this as simple and useful as possible so you can move through tax season with confidence and a clear plan. So let's begin the Tax tips for NH landlords.

Q: Is rental income taxable in New Hampshire, and do I still have to report it federally?

A: Yes. Even though New Hampshire doesn’t tax wage income, the IRS still requires you to report all rental income on your federal return. The only exception is if you rent your NH property for 14 days or fewer each year; in that case, the income is tax-free. Beyond that, every rent payment, security deposit used as rent, or additional fee from a New Hampshire rental must be included on your federal taxes.

Q: What tax deductions can New Hampshire landlords claim?

A:NH landlords can deduct the same federal rental expenses as landlords elsewhere: mortgage interest, property taxes (which are significant in NH), insurance, repairs, maintenance, utilities, and depreciation. Improvements to New Hampshire properties — things like septic replacements, well upgrades, new roofs, or energy-efficient upgrades — are depreciated over time rather than deducted immediately.

Q: How do I report rental income from a New Hampshire property?

A: New Hampshire rental properties are reported on Schedule E of your federal Form 1040. Even though NH has no state income tax on wages, you still must report rental activity federally. Each NH property gets its own line with income, expenses, and depreciation. If you own multiple NH rentals — long-term, seasonal, or multi-unit — they each get reported individually.

Q: Is rental income in New Hampshire subject to self-employment tax?

A: Generally, no. Rental income from a New Hampshire property is considered passive and not subject to self-employment tax. As long as you’re acting as a traditional landlord — collecting rent, maintaining the property, handling normal repairs — your NH rental income is not subject to the 15.3% self-employment tax.

Q: Can rental losses from a New Hampshire property offset my wages or other income?

A: Often, yes. If your income is under $100,000, you can usually deduct up to $25,000 of NH rental losses against other income. This phases out between $100,000 and $150,000. Above that, New Hampshire landlords typically carry rental losses forward for future years, unless they qualify as real-estate professionals.

Q: What tax forms do New Hampshire sole proprietors and 1099 workers file?

A: Even though NH has no income tax on wages, self-employed and 1099 workers still file full federal returns. You’ll file Form 1040 with Schedule C for business income and expenses. If you earned $400 or more in NH self-employment income, you’ll also file Schedule SE for self-employment tax. NH does not tax business income, but the IRS does — so accurate federal reporting is critical.

Q: Do self-employed individuals in New Hampshire need to pay quarterly estimated taxes?

A: Yes. If you’re working in New Hampshire as a freelancer, contractor, or sole proprietor and expect to owe over $1,000 in federal tax, you should make quarterly estimated payments. NH won’t require them, but the IRS will. Payments are due in April, June, September, and January. (These payments can be made electronically through the IRS Direct Pay system or EFTPS. Link here!)

Q: What is the self-employment tax for New Hampshire workers?

A: Because NH doesn’t tax earned income, the self-employment tax is entirely federal. New Hampshire freelancers pay the standard 15.3% self-employment tax to the IRS (Social Security + Medicare), applied to 92.35% of their net business income. Half of this is deductible on your federal return.

Q: What business expenses can New Hampshire sole proprietors deduct?

A: Any ordinary and necessary expense related to operating your NH business. Common examples: mileage between NH clients and job sites, home office expenses (common in our state), supplies, software, insurance, phone/internet used for business, advertising, and tools/equipment. If you drive around the Lakes Region, Upper Valley, or Concord area for client work, your mileage is generally deductible.

Q: How do I report income received on a 1099-NEC for work performed in New Hampshire?A: Report the income on Schedule C, even if the client didn’t issue the 1099 until late in the year or sent it electronically. While New Hampshire itself won’t tax this income, the IRS will — which is why proper Schedule C reporting matters.

Q: Do I have to report NH self-employment income if I didn’t get a 1099?

A: Yes. New Hampshire businesses often pay contractors under $600 and aren’t required to issue a 1099, but you still must report the income federally. NH doesn’t tax the income, but the IRS requires full reporting of all business receipts.

Q: Do New Hampshire 1099 contractors pay more tax than NH W-2 employees?

A:In some ways, yes. NH W-2 workers avoid state income tax and only pay federal tax and their half of FICA. NH 1099 contractors pay the full 15.3% self-employment tax but also gain access to significant deductions (home office, mileage, equipment, software, etc.) that W-2 employees in NH can’t claim. In practice, many NH contractors effectively manage their overall tax burden.