Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

8.

Income Taxes

There is no provision for federal income taxes for the years ended December 31, 2019 and December 31, 2018 due to the availability of net operating loss carryforwards. At December 31, 2019 and December 31, 2018, our Company had NOL’s approximating $1,622,000 and $2,478,000, respectively. The operating losses at December 31, 2019 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, 2019 and December 31, 2018. Our Company has established a 100% valuation allowance of $454,200 and $693,800 at December 31, 2019 and December 31, 2018, 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
	2019		2018
Current state taxes	$	52,400	$	93,400
Deferred state taxes		–		108,800
	$	52,400	$	202,200

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

	2019					2018
	Amount			%		Amount			%
Income tax at U.S. federal income tax rate	$	158,600			21	$	398,200			21
State tax net of federal tax effect		52,300			7		202,200			7
Utilization of operating losses		(158,600	)		(21)		(398,200	)		(21	)
	$	52,300			7	$	202,200			7

The components of deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows:

	2019			2018
Deferred tax asset for NOL carryforwards	$	454,200		$	693,800
Deferred tax liability - other		(47,400	)		(108,800	)
Valuation allowance		(454,200	)		(693,800	)
	$	(47,400	)	$	(108,800	)

The income tax provision consists of the following:

	2019			2018
Current	$	119,700		$	97,000
Deferred		(67,400	)		108,800
	$	52,300		$	205,800

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, 2019. There was no change in unrecognized tax benefits during the year ended December 31, 2019 and there was no accrual for uncertain tax positions as of December 31, 2019.

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 2016 through 2019 remain subject to examination by U.S. federal and state tax jurisdictions.