Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

9.

Income Taxes

There is no provision for federal income taxes for the years ended December 31, 2018 and December 31, 2017 due to the availability of net operating loss carryforwards. At December 31, 2018 and December 31, 2017, our Company had NOL’s approximating $2,478,000 and $4,183,000, respectively. The operating losses at December 31, 2018 are available to offset future taxable income; however, if not utilized, they expire in varying amounts through the year 2032. The utilization of these NOL’s to reduce future income taxes will depend on the generation of sufficient taxable income prior to their expiration. There were no material temporary differences for the years ended December 31, 2018 and December 31, 2017. Our Company has established a 100% valuation allowance of approximately $694,000 and $1,171,000 at December 31, 2018 and December 31, 2017, respectively, for the deferred tax assets due to the uncertainty of their realization.

The components for state income tax expense resulting from the limitation on the use of net operating losses are:

	Year ended December 31
	2018		2017
Current state taxes	$	93,400		–
Deferred state taxes		108,800		–
	$	202,200		–

On December 22, 2017, The Tax Cuts and Jobs Act (the “Act”) was signed into law. The Act decreases the U.S. corporate federal income tax rate from a maximum of 35% to a flat 21% effective January 1, 2018. The impact of the re-measurement on our Company’s net tax asset, as of December 31, 2017, was a decrease of approximately $586,000 in deferred tax assets with a corresponding decrease in our Company’s valuation allowance.

The reconciliation of the statutory federal rate to our Company’s effective tax rate follows:

	2018						2017
	Amount			%			Amount			%
Income tax benefit at U.S. federal income tax rate	$	(520,300	)		(21	)	$	(1,422,300	)		(34	)
State tax net of federal tax effect		(173,500	)		(7	)		(334,600	)		(8	)
Tax rate change								585,600			14
Change in valuation allowance		693,800			28			1,171,300			28
	$	–			–		$	–			–

Our Company has adopted the provisions of FASB ASC 740-10-50-15, “Unrecognized Tax Benefit Related Disclosures.” There were no unrecognized tax benefits as of the date of adoption and no unrecognized tax benefits at December 31, 2018. There was no change in unrecognized tax benefits during the year ended December 31, 2018 and there was no accrual for uncertain tax positions as of December 31, 2018.

Interest and penalties totaling $3,600 in 2018 were recognized as income tax expense in the statement of operations and in the balance sheet. Tax years from 2015 through 2018 remain subject to examination by U.S. federal and state tax jurisdictions.