@DrKLS wrote:
Thanks for the response, I will see if they can reclassify me.
One last question - I had payroll for two employees, rented an office space, and other minor expenses.
Can I still count those on the Schedule C and just do not show income?
If you are a W-2 worker, and you hired subcontractors to help you, there is no way to deduct those expenses. You can't have a schedule C with expenses and no income, it won't end up as a deduction on your tax return. And you can't deduct W-2 expenses by putting them on a Schedule C. And the itemized deduction for W-2 employees was eliminated in 2018 tax reform.
I have never heard of an employee being reclassified as an independent contractor. It almost always goes the other way around--someone who was classified as a contractor but should have been getting benefits. You really should have known something was wrong when you started getting pay stubs with tax withholding and benefits.
There is a fair amount of paperwork now for the employer to reclassify you as a contractor. And if you used any employee benefits (medical insurance, retirement plan) it may be impossible to reclassify you. You may need to sue them to recover the amounts you spent on subcontractors.
If you approach them about this and they do not readily recognize the problem, you may need to retain an attorney. Did you have any employment documents such as a signed contract?
Here are some links to start reading.
https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation
https://www.irs.gov/newsroom/employee-or-independent-contractor-know-the-rules
https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-o...
