Can I take legal action? My employer switched me from W2 to 1099 at the end of the year

This is actually a pretty serious issue. What your employer did is not just unfair - it's illegal. An employer cannot simply reclassify you from W2 to 1099 retroactively. The IRS has specific criteria that determine whether someone is an employee (W2) or an independent contractor (1099). Based on what you've described - working set hours at their location, using their equipment, being paid hourly, and them controlling how you worked - you were clearly an employee, not an independent contractor. This reclassification sounds like what's commonly called "misclassification," and it's often done to avoid paying employer taxes (Social Security, Medicare, unemployment insurance, etc.). I would recommend first gathering all your documentation - original offer letter, emails, pay stubs, the email where they asked to change your status, and any other relevant communications. Then, you have a few options:

I went through something similar last year with a startup that tried to change my status after I had already worked there for 8 months. I was completely lost about what forms to file and how to explain the situation to the IRS. I ended up using https://taxr.ai to help sort through all the documentation and figure out exactly what I needed to file. Their system analyzed my offer letter, pay stubs, and the emails about the status change, then provided a complete breakdown of what forms I needed and even helped me draft a formal letter to my former employer. It saved me from paying thousands in taxes that weren't actually my responsibility.

I was skeptical too, but after trying https://taxr.ai for my own contractor vs. employee issue, I'm glad I did. What really helped was the ability to upload all my documents and communications and get a clear determination based on the actual IRS classification tests. The system identified 7 specific factors from my work arrangement that legally classified me as an employee, not a contractor. Armed with this documentation, my former employer agreed to correct my tax forms rather than face potential IRS penalties. Saved me about $4,800 in taxes I shouldn't have had to pay!

If you're having trouble getting your employer to respond or fix this, you might need to contact the IRS directly. I tried for WEEKS to get through to someone at the IRS about a similar issue last year - kept getting disconnected or waiting on hold for hours. Finally found https://claimyr.com and used their service to get a callback from the IRS. Check out how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that retroactive reclassification is not allowed and walked me through filing the correct forms to dispute the 1099. Having an actual conversation with someone who could explain the process made a huge difference.

Just wanted to update - I apologize for being so skeptical about Claimyr. After spending THREE DAYS trying to reach the IRS myself about a misclassification issue, I gave in and tried the service. Got a callback from an IRS agent in about 90 minutes! The agent confirmed that what my employer did was improper and explained exactly what forms I needed to file. They even sent me an email confirming our conversation so I had documentation to show my employer. Sometimes it's worth paying for a service that saves you from endless frustration. My mistake was assuming I could easily reach the IRS on my own!

I'm an accounting student who works part-time at a tax prep office. This misclassification stuff happens ALL THE TIME. Here's what you need to know: 1. The difference between W2 and 1099 is huge. As a W2 employee, your employer pays half of your Social Security and Medicare taxes (7.65%). As a 1099, you pay the full 15.3% yourself. 2. File IRS Form SS-8 to request a determination of your worker status. This form asks detailed questions about your work relationship. 3. While waiting for the SS-8 determination (which can take months), file Form 8919 with your tax return to report the uncollected taxes. 4. Your state labor department might be faster than the IRS, so consider filing a complaint there too. Many small employers don't understand they can't just choose which classification is easier for them. The classification is determined by the nature of the work relationship, not preference.

Am I the only one who thinks it's messed up that the burden is on employees to fight this? Companies know exactly what they're doing - saving thousands in taxes by shifting the burden to workers. My friend's architecture firm did this to 12 interns last year and only 2 fought it because everyone else was afraid of "causing trouble" in the industry.

This is absolutely infuriating and unfortunately way too common. What your employer did is completely illegal - they can't just decide to reclassify you retroactively because it's "easier for accounting." That's exactly the kind of employer abuse that makes my blood boil. Here's the thing - you clearly were an employee based on everything you described. You worked set hours, used their equipment, they controlled how you did your work, and you were paid hourly. The IRS has a 20-factor test for this, and you'd pass it easily. Don't let them get away with this. You shouldn't have to pay an extra $3,400 because they wanted to dodge their tax responsibilities. I'd recommend documenting everything first - that email where they asked to switch you is golden evidence. Then give them ONE chance to fix it by sending a formal email explaining that retroactive reclassification is illegal and asking them to issue a corrected W-2. If they refuse or ignore you, file Form SS-8 with the IRS immediately. The IRS takes worker misclassification seriously, especially when there's clear evidence like you have. You might also want to contact your state's labor department - they often move faster than the IRS. Don't feel bad about "causing trouble" - they caused the trouble when they decided to break the law to save money. You're just protecting yourself.

This is such a frustrating situation, but you're definitely not alone in dealing with this kind of employer abuse. What they did is textbook worker misclassification - they're trying to save money on their share of payroll taxes by dumping the entire burden on you. The fact that they waited until December to ask about switching you retroactively is a huge red flag. They knew you were an employee the whole time (hourly pay, set schedule, working at their location with their equipment), but they're hoping you don't understand the tax implications. Here's what I'd do: First, screenshot and save that December email where they asked to switch you - that's smoking gun evidence. Then send them a professional but firm email explaining that retroactive reclassification violates IRS rules and creates an unfair tax burden for you. Give them about a week to respond and offer to correct the situation. If they don't respond or refuse to fix it, file Form SS-8 with the IRS to get an official determination of your worker status. You can also file Form 8919 with your tax return to report the uncollected Social Security and Medicare taxes that should have been paid by your employer. Don't let them intimidate you into accepting this. You worked as an employee, you should be classified as an employee, and they need to pay their fair share of the taxes. The $3,400 they're trying to stick you with should be their responsibility, not yours.

This is absolutely outrageous and I'm so sorry you're dealing with this. What your employer did isn't just unfair - it's completely illegal and frankly disgusting. They knew exactly what they were doing by waiting until December to spring this on you. You were clearly an employee based on everything you've described - hourly pay, working at their location, following their schedule, using their equipment. The IRS has strict criteria for this, and retroactive reclassification to avoid paying employer taxes is a serious violation. Here's my advice: Document EVERYTHING immediately. That December email where they asked to switch you "for easier accounting" is pure gold - it's literally them admitting they want to violate tax law for their convenience. Screenshot it, save it, back it up. Then send them one professional email explaining that retroactive reclassification violates IRS regulations and creates an illegal tax burden for you. Give them exactly one week to respond with a plan to correct this by issuing a proper W-2 and paying their share of the taxes. If they refuse or ignore you, file Form SS-8 with the IRS immediately to get an official worker classification determination. Also file Form 8919 with your tax return to report the uncollected taxes they should have paid. Don't feel guilty about "causing problems" - THEY caused the problem when they decided to break federal tax law. You're just protecting yourself from their illegal actions. The $3,400 they're trying to steal from you could pay for a lot of textbooks and expenses you actually need. Fight this. You have a slam-dunk case and the law is 100% on your side.

This situation is infuriating but unfortunately all too common. Your employer absolutely cannot retroactively change your classification from W2 to 1099 - what they did is illegal worker misclassification and it's designed to shift their tax burden onto you. Based on your description (hourly pay, set schedule, working at their location, them controlling your work), you were clearly an employee under IRS guidelines. The fact that they waited until December to ask about this "for easier accounting" shows they knew exactly what they were doing. Here's what I'd recommend: First, save that December email - it's smoking gun evidence of their intent to violate tax law. Then send them a professional but firm email explaining that retroactive reclassification is illegal and asking them to correct the situation by issuing a proper W-2 and paying their share of the taxes. If they refuse or don't respond within a week, file Form SS-8 with the IRS to get an official worker classification determination, and file Form 8919 with your tax return to report the uncollected taxes they should have paid. Don't feel bad about "causing trouble" - they caused the trouble when they decided to steal $3,400 from a college student to avoid paying their legal obligations. You have a strong case and the law is completely on your side. Fight this!

This is absolutely infuriating and I'm so sorry you're going through this. What your employer did is completely illegal - they cannot retroactively reclassify you from W2 to 1099 just because it's "easier for their accounting." This is textbook worker misclassification designed to shift their tax burden onto you. Based on everything you've described - hourly pay, working at their location, following their schedule, using their equipment - you were clearly an employee under IRS guidelines. The fact that they waited until December to spring this on you shows they knew exactly what they were doing. Here's what you need to do immediately: Save that December email where they asked to switch you - it's smoking gun evidence of their illegal intent. Then send them ONE professional email explaining that retroactive reclassification violates federal tax law and creates an unfair $3,400 tax burden for you. Ask them to correct this by issuing a proper W-2 and paying their share of the taxes they legally owe. Give them exactly one week to respond. If they refuse or ignore you, file Form SS-8 with the IRS to get an official worker classification determination, and file Form 8919 with your tax return to report the taxes they should have paid. Don't feel guilty about "causing trouble" - THEY caused trouble when they decided to break federal law to steal money from a college student. You have an ironclad case here. That December email alone proves they violated IRS regulations. Fight this and make them pay what they legally owe instead of letting them dump their tax obligations on you!

This is absolutely unacceptable and I'm furious on your behalf. What your employer did is not just "inconvenient" - it's straight-up illegal wage theft disguised as administrative convenience. They cannot retroactively reclassify you from W2 to 1099 after you've already worked as an employee for 8 months. You were clearly an employee based on everything you described - hourly pay, set schedule, working at their location with their equipment, them controlling how you did your work. The IRS has specific tests for this, and you pass every single one as an employee, not an independent contractor. The fact that they waited until December to ask about this "for easier accounting" is absolutely damning evidence. They knew you were an employee the whole time but decided to try to scam you out of $3,400 in taxes they're legally required to pay. Here's exactly what you need to do: Save that December email immediately - screenshot it, back it up, print it out. It's smoking gun evidence of their illegal intent. Then send them ONE professional email explaining that retroactive reclassification violates federal tax law and asking them to correct this by issuing a proper W-2 and paying the employer taxes they owe. Give them one week to respond. If they refuse or ignore you, file Form SS-8 with the IRS for an official worker classification determination and Form 8919 with your tax return to report their unpaid taxes. Don't you dare feel guilty about this. They're literally trying to steal thousands of dollars from a college student to avoid paying their legal obligations. You have an ironclad case - fight it and win!

This is absolutely outrageous and illegal! I'm so sorry you're dealing with this, but you need to know that what they did is called "worker misclassification" and it's a serious violation of federal tax law. They CANNOT just decide to reclassify you retroactively because it's "easier for their accounting." Based on everything you described - hourly pay, working at their location, following their schedule, using their equipment - you were 100% an employee, not an independent contractor. The IRS has very specific criteria for this, and you clearly meet all the employee qualifications. That December email asking to switch you is actually PERFECT evidence of their illegal intent. Save it immediately! Here's what I'd do: 1. Document everything - that email, your original job offer, pay stubs showing tax withholding, any communications about your work schedule 2. Send them ONE professional email explaining that retroactive reclassification is illegal and asking them to issue a corrected W-2 and pay their share of taxes 3. Give them one week to respond 4. If they refuse, file Form SS-8 with the IRS to get an official determination of your worker status 5. File Form 8919 with your tax return to report the uncollected employer taxes Don't feel bad about "causing trouble" - THEY caused the trouble when they decided to steal $3,400 from a college student to avoid paying their legal obligations. You have an ironclad case here. Fight this and make them do the right thing!