The end of January, I received a W-2 from the tax place and questioned the employer why and she told me they had to because they had to pay in unemployment, etc. on me. Now, I am having to pay taxes on this money and I don't feel it's fair, because if I had had the opportunity to have the taxes withheld, I would have certainly done so.
Did the W-2 show no Federal or state income taxes were withheld? If so, then yes, you will have to pay your income tax when you file your return. Since they were required to withhold the Social Security and Medicare taxes (6.2% and 1.45%, respectively, of your gross pay), I'll assume your W-2 indicates that they did that unless you tell us otherwise.
As Taxagent said, if you HAD been given a 1099, you'd have had to pay your income taxes AND both halves of the Social Security and Medicare taxes out of your pay (the employer also pays 6.2% for Social Security and 1.45% for Medicare if you are a W-2 employee, but if you are an independent contractor you have to pay it yourself instead). That's 15.3% of your gross pay, in addition to your income taxes. So it's better to be a W-2 employee, for any given pay rate.
That said, they really should have given you a W-4 to fill out at the beginning. If they were not experienced at being employers (especially if they thought at the time that they could give you a 1099), they might not have realized that back then.
During my time with the company, I was told I could write off my mileage, etc. to help reduce my tax liability: however, now that I have a W2, this is not the case.
As a W-2 employee, your commuting costs aren't tax-deductible, that's true. Only miles driven on the job (going to and from client sites, for example) would be deductible.