You will need to report your income as an employee and not an independent contractor because you received a Form W-2.
Had you received a Form 1099-MISC with box 7 completed, then you would report the income on the Form 1040 Schedule C or C-EZ and claim the applicable business expenses.
You will need to clarify your work status with your employer. It appears that they believe you are an employee rather than an independent contractor.
