Components of Income Tax Expense (Benefit) |
The components of income tax expense (benefit) are as follows:
|
|
For the
Year Ended December 31, 2022 |
|
|
For the
Year Ended December 31, 2021 |
|
Current: |
|
|
|
|
|
|
|
|
Federal |
|
$ |
- |
|
|
$ |
- |
|
State |
|
|
23,655 |
|
|
|
17,723 |
|
|
|
|
23,655 |
|
|
|
17,723 |
|
Deferred: |
|
|
|
|
|
|
|
|
Federal |
|
|
- |
|
|
|
- |
|
State |
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
Total Income tax expense |
|
$ |
23,655 |
|
|
$ |
17,723 |
|
|
Significant Components of Deferred Income Tax Assets and Liabilities |
Significant components of the Company’s deferred income tax assets and liabilities are as follows:
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Deferred tax assets: |
|
|
|
|
|
|
|
|
Net operating loss carryforward |
|
$ |
1,632,301 |
|
|
$ |
1,262,269 |
|
Accounts receivable |
|
|
61,005 |
|
|
|
104,635 |
|
Compensation |
|
|
560,735 |
|
|
|
555,936 |
|
Inventory |
|
|
369,456 |
|
|
|
523,131 |
|
Other |
|
|
26,465 |
|
|
|
1,244 |
|
Total deferred tax assets |
|
|
2,649,962 |
|
|
|
2,447,215 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Intangibles |
|
|
(190,817 |
) |
|
|
(198,801 |
) |
Property and equipment |
|
|
(149 |
) |
|
|
(1,522 |
) |
Total deferred tax liabilities |
|
|
(190,966 |
) |
|
|
(200,323 |
) |
Deferred tax assets, net |
|
|
2,458,996 |
|
|
|
2,246,892 |
|
Valuation allowance: |
|
|
|
|
|
|
|
|
Beginning of year |
|
|
(2,246,892 |
) |
|
|
(1,816,546 |
) |
Increase during year |
|
|
(212,104 |
) |
|
|
(430,346 |
) |
Ending balance |
|
|
(2,458,996 |
) |
|
|
(2,246,892 |
) |
Net deferred tax asset |
|
$ |
- |
|
|
$ |
- |
|
|
Reconciliation of Income Tax Computed at U.S. Statutory Rate to Effective Income Tax Rate |
A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows:
|
|
For the
Year Ended December 31, 2022 |
|
|
For the
Year Ended December 31, 2021 |
|
Statutory U.S. federal income tax rate |
|
|
21.0 |
% |
|
|
21.0 |
% |
Gain on Payroll Protection Program Loan |
|
|
0.0 |
% |
|
|
4.5 |
% |
Permanent differences |
|
|
-27.6 |
% |
|
|
0.0 |
% |
State income taxes, net of federal tax benefit |
|
|
0.6 |
% |
|
|
-0.8 |
% |
Change in deferred tax asset valuation allowance |
|
|
6.8 |
% |
|
|
-25.8 |
% |
Effective income tax rate |
|
|
0.8 |
% |
|
|
-1.1 |
% |
|