Do I have to pay unemployment tax if I am self-employed?

My daughter just started working a job where the are giving her a 1099 instead of being a W-2 employee. I know she will need to pay SE taxes (SS and Medicare) and possibly quarterly estimated tax, but is she also on the hook for FUTA? Everything I can find says that only the employer pays FUTA, but someone else I know said self-employed people need to pay it too. But I can’t find confirmation of that anywhere.

I’ve never paid it and never heard of anyone else paying it and I’ve been exclusively or primarily self-employed for about 15 years. In fact, even when I incorporated and became an actual employee I was advised by payroll and tax people I was exempt. I sure don’t think there’s anyway I could layoff myself and collect. If I’m wrong please don’t report me. I also don’t know how all these “jobs” get away with claiming that people are 1099 and self-employed but that’s a different subject.

No, she will not pay it, nor will she be eligible for it.

I was self employed for about ten years, and never paid it. Just the SE tax on top of the regular tax.

Unemployment tax and subsequent benefits are administered by the states, so different laws apply.

Unemployment insurance is available privately, but usually is not a good deal.

I was self employed over many years. You are required to file quarterly (USA) +your income.
When I decided to take early retirement Social Security office came up empty, reducing my retirement income by half

If you want to be covered by unemployment, create an LLC, elect to be taxed as an S-Corp, and have the LLC hire her to do the work, paying her on a W-2 out of the money the LLC gets from contracting with the actual employer. Otherwise, no, you will not pay unemployment.

No, unemployment tax is so that your employees have relief if your business lays them off.

As a self employed individual, that is not anyone else’s responsibility, only her own.

Question though, what job does she have that she is a 1099 contractor? There are many jobs that qualify, but many employers have incorrectly classified people who should be w-2 employees as contractors in order to avoid having to pay payroll taxes, unemployment, and worker’s comp.

The IRS has very specific rules about what can be classified as contractor work, you should see if she actually qualifies.

Yep, This is what I’ve done a s a self employed person for the last 5 years and once when work dried up I was able to receive unemployment at the state maximum until I was able to get back on my feet. The nice thing about this is you get to pick a salary and then take the rest of your profits and not pay the self employment taxes on it. My accountant suggested it and I’ve been very happy with the set up.

I work in entertainment and it has been very common for people to create “loan-out” corporations, but employers are becoming more reluctant to pay through the corporation, for reasons unclear to me. Make sure the people who require your services are willing to pay through a corporation before you do this. As a corporation you’ll spend more of either your time or money on bookkeeping, and more money on preparing your taxes. Some states have minimum taxes for corps. And so on. Consult a CPA.

Yep, it’s what we suggest for self-employed people making enough money to save in self-employment taxes what it costs to fill out all the extra paperwork and run payroll. I don’t know where the exact line is, but if you’re not doing this as a full-time job making good money it’s not going to be worth it.

She has two part-time jobs that each pay her on a 1099. One is as an assistant to a real estate agent. The agent works for a large brokerage firm but my daughter is not being paid by the firm, she is being paid personally by the agent. The other job is as an assistant to a real estate lawyer. I believe he is paying her with the firm’s check.