Will the "finished size" of your 7-1/4 inch squares be 6-3/4 inches?
Or another way of figuring it:
IF the finished size of the 7-1/4 inch squares will be 6-3/4 inches:
1/2 of 6-3/4 =
1/2 x 27/4 = 27/8 = 3-3/8 -> the finished size of the HST square unit
27/8 + 7/8 = 34/8 = 4-2/8 = 4-1/4 -> the theoretical size to cut the squares