Im about to open my own online business and the website will be charging taxes for md (the state i live in)?

but what do i do when tax season comes back around? i heard i would be filing a 1099 but how and who gives it to me?? do i do it myself? this tax thing is very confusing to me.

??? You may want to consult a competent tax preparer/accountant. Or visit the business section of your local bookstore and find a decent book or two on small business accounting and taxation. Also check out www.irs. gov, they have resources for small businesses.

If you don't understand the taxes and you make lots of money, you could get into a heap of trouble. You need to deal with sales/use tax, income tax and self-employment taxes.

A 1099 is an information return given to the IRS by businesses who hire independent contractors to report the payments to those contractors. The independent contractor also gets a copy of the 1099.

If you are the business owner and people who buy your products pay you directly, then there will be no 1099 issued to you - you are responsible for keeping track of your income, and if you get audited by the IRS, you will need to supply the documentation (receipts, sales logs, bank deposits etc.)

Usually, sales tax and income tax are two separate things with two separate tax returns. You pay your sales tax to the state based on the sales you have made.

You generate revenue and deduct your expenses to get your net income. You report your net income on your Federal 1040 form - probably on a Schedule C - but this will vary depending on the business structure you have. You will also have to pay self-employment tax with your Federal tax return.

You also report this net income on your state income tax form. You might also have to file a local income tax form.

If you are doing Internet sales, you will have to check with each state you do business in to see if you owe them sales tax. Many states are now starting to charge sales tax or use tax on Internet sales.

You don't issue yourself a 1099.
You simply report all of the income on a schedule C. if your net proficts are $400 or more, you will also owe SE tax.