In 2008 I worked for an employer who paid me in cash she then went on and filed a 1099 form, I had to pay my taxes that year as an independent contractor when in fact I was an employee. I filled out a SS-8 form and the IRS determined I was in fact an employee what do I do now?

Well, you can amend your 2008 return with Form 1040X and Form 8919, which would have the effect of refunding HALF of the self-employment tax you paid with your 2008 tax return.

However, it would also probably have the effect of getting you FIRED, because the IRS would then go to your employer and insist that she pay HER half of the FICA taxes that were not paid in 2008, plus interest plus penalties.

Once the IRS gets through completely and totally screwing up her life, she will then start looking for whomever turned her in. You have to decide if she could easily identfy you as the culprit. If so, you can count on her finding a reason (vlalid or not) for terminating your employment with her.

Given that, based on current employment statistics, there are TEN applicants for every available job, I do not think she would have any problem replacing you with someone who would more than happy to be considered an independent contractor.

Think on this! Think LONG and HARD!

If you claimed any expenses on schedule C or C-EZ, on filing your amended tax return you may even owe taxes.
With W-2 income, you can deduct those expenses only as itemized deduction.