Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

8.

Income Taxes

There is no provision for federal income taxes for the years ended December 31, 2020 and December 31, 2019 due to the availability of federal and state net operating loss (NOL’s) carryforwards. At December 31, 2020 and December 31, 2019, our Company had federal NOL’s approximating $1,166,100 and $1,622,000, respectively and state NOL’s approximating $2,647,000 and $2,843,100, respectively. The federal and state net operating losses at December 31, 2020 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, 2020 and December 31, 2019. Our Company has established a 100% valuation allowance of $456,700 and $454,200 at December 31, 2020 and December 31, 2019, 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
	2020			2019
Current state taxes	$	29,400		$	52,400
Deferred state taxes		(47,400	)		–
	$	(18,000	)	$	52,400

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

	2020						2019
	Amount			%			Amount			%
Income tax at U.S. federal income tax rate	$	106,700			21		$	158,600			21
State tax net of federal tax effect		(18,100	)		(4	)		52,300			7
Other		15,800			3			–			–
Change in valuation allowance		(122,500	)		(24	)		(158,600	)		(21	)
	$	(18,100	)		(4	)	$	52,300			7

The components of deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows:

	2020			2019
Deferred tax asset for NOL carryforwards	$	456,700		$	454,200
Deferred tax liability - other		–			(47,400	)
Valuation allowance		(456,700	)		(454,200	)
	$	–		$	(47,400	)

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, 2020. There was no change in unrecognized tax benefits during the year ended December 31, 2020 and there was no accrual for uncertain tax positions as of December 31, 2020.

Tax years from 2018 through 2020 remain subject to examination by U.S. federal and state tax jurisdictions.