I worked for a company that did not hold taxes out on me during my time of employment. They instead sent me a 1099. Now it is my understanding that I was an employee not a contractor. I believe they did this to avoid having to take out workers comp insurance.
Do I need to pay all of the taxes on this income as if I was an employee or what?

Whether you were improperly classified as an independent contractor would depend on a variety of circumstaces. The most usuall tests have to do with the amount of control and independence invovled in your position. Since these things are highly fact specific, I sugest you try to contact an attorney regarding your legal options. Independent contractors are responsible for paying their own employment taxes in a timely fashion. You may also want to contact an accountant. For your reference, you can find an attorney through the locator service on LawInfo's home page at: http://www.lawinfo.com/.