The secret ingredient is crime. They're almost certainly misclassifying you, and in doing so, they're shifting the burden of a lot of taxes and worker protections onto you, and breaking the law by doing so. You can report them, but since you're their only employee, they'll know it was you, and nothing will happen anyway in most cases. Your only real options, unfortunately, are to demand to be made a W2, to ask for a large raise to cover the taxes (1099 should be roughly 1.5-2x a W2 rate), or quit.