Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Components of Provision for Income Taxes

Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the period December 31, 2018 and December 31, 2017) are as follows:

	Year Ended			Year Ended
	December 31, 2018			December 31, 2017
Current tax benefit
Federal	$	(222,603	)	$	(1,690,948	)
State		(46,058	)		(220,735	)
Total current tax benefit		(268,661	)		(1,911,683	)
Deferred tax expense		685,416			(31,974	)
Rate change adjustment		-			1,754,830
Valuation allowance (expense)		(416,755	)		3,620,363
Income tax (reduction) benefit	$	-		$	3,431,536

Schedule of Reconciliation of Tax Provision with Expected Provision

The reconciliation of the income tax computed at the combined federal and state statutory rate of 25.3% for the year ended December 31, 2018 and 37.6% for the year ended December 31, 2017 to the income tax benefit is as follows:

	Year Ended December 31,						Year Ended December 31,
	2018			2017			2017			2017
Benefit on net loss	$	413,361			-87.5	%	$	(1,955,121	)		37.6	%
Nondeductible expenses		3,394			(0.7	)%		11,464			(0.2	)%
Rate change adjustment		-			0.0	%		1,754,830			-33.8	%
Valuation allowance (expense)		(416,755	)		88	%		3,620,363			-69.7	%
Other items		-			0.0	%		-			0.0	%
Tax benefit/effective rate	$	-			0	%	$	3,431,536			-66.1	%

Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax liabilities and assets as of December 31, 2018 and December 31, 2017 are as follows:

	As of December 31,
	2018			2017
Deferred tax liabilities:
Tax expense for debt issuance costs	$	-		$	-
Tax expense for internally developed software		9,976			15,871
Tax depreciation in excess of book		4,975			8,921
Total deferred tax liabilities		14,951			24,792
Deferred tax assets:
Loss carryforwards		2,156,428			2,393,172
Step up in basis at contribution to C-Corp		853,410			1,024,590
Stock option expense		87,056			80,778
Step up in basis - purchase of non-controlling interest		59,243			63,890
Allowance for credit losses		41,849			62,154
Accrued liabilities		20,572			20,571
Total deferred tax asset		3,218,558			3,645,155
Valuation allowance		(3,203,607	)		(3,620,363	)
Net deferred tax asset	$	-		$	-