As far as you are concerned right now, you are being treated as an independent contractor and you will fill out Sched C at the end of the year. If you believe that you SHOULD be an employee and the employer is treating you wrong, you can "turn in" the offender to the IRS and they will make a determination of contractor/employee status. Keep in mind, however, that if it is a small company, they will likely find out who turned them in. The IRS has actually created a form you can attach to your return so that you can do the reporting easily.

There are advantages and disadvantages to being contract.

Cons: Double the Social Security & Medicare Tax (Extra 7.65%)
Pros: Taxes are computed AFTER deducting allowable expenses.
You can possibly put away more for retirement, too using SEPs or Solo-401ks.

The expense side though....watch out for incredible deductions! Watch out for unscrupulous preparers. Expenses need to be ORDINARY and NECESSARY for that particular job. You can't deduct pilot socks and underwear! You can deduct other expenses, but only in proportion to your contract job versus your day job. (Example: You for XYZ Airlines and get a W-2. You sideline for DEF as a contractor training other pilots. You earn $30K from XYZ and $10K from DEF. You can deduct 25% of your pilot's license, sunglasses, caps, etc from the DEF contract position on Sched C; the other 75% can be deducted as a Misc Unreimbursed expense on Sch A, but subject to a reduction.)

R Klein, EA

(I am a federally licensed tax specialist).