You probably already know the answer if you have talked to a tax accountant..if they set the hours than its employee and they need to withhold taxes. First, fi

You probably already know the answer if you have talked to a tax accountant..if they set the hours than its employee and they need to withhold taxes. First, find some other projects/gigs to cover your expenses and do not tell the startup. Second, when those other gigs are secured ..spend $150 on a CPA that does tax work..have him compose a letter stating that under work conditions at startup that they need to state you as employee and withhold payroll taxes. Give cpa any docs that he needs to document this. The purpose is not to force startup to do anything. it sot protect you and your family. From now on, if firm sets working, hours, and has full quality control of the work than you need to only accept w-2 employee status. Your local cpa will have a employee/ tax check list as far as conditions make it employee and which ones do not so ask for that. if you cannot afford he $150 to $250 ask your local CPA state board or SBA office to give you a list of those CPAs that sometimes do free advice workshops on this. And most important do not under any circumstances let the startup know your anger..just get the extra gigs so that you can get out of the situation. S the project manager I am using know states, you have to care about the money as the right startups will than take that market rate of a freelancer(no not salary rate) and say well we can do 75% and pay rest in stock is that acceptable and as employee.