@lindahills123 what were the allowances for? if there were things like a tool or travel allowance, as a contractor, that is income to you, but the actual tools you bought (or travel costs) can be deducted, so it's a pretty much a wash in the end. But if you continue to get the allowance as a W-2 employee6, it remains taxable income to you, but you can't deduct the expenses.
Also, you will no longer be responsible for self-employment tax, but your employer will withhold social security and medicare tax, so without a long explanation, that is can be effective wash as well. it depends on whether your pay is being adjusted when you move from contactor to W-2.
