Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

There is no provision for federal income taxes for the years ended December 31, 2021 and December 31, 2020 due to the availability of net operating loss (NOL’s) carryforwards. At December 31, 2021 and December 31, 2020, our Company had federal NOL’s approximating $1,174,300 and $1,166,100, respectively and state NOL’s approximating $2,638,800 and $2,647,000, respectively. The net operating losses at December 31, 2021 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, 2021 and December 31, 2020. Our Company has established a 100% valuation allowance of $457,700 and $456,700 at December 31, 2021 and December 31, 2020, 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
	2021			2020
Current state taxes	$	(5,700	)	$	29,300
Deferred state taxes		—			(47,400	)
Income tax expense	$	(5,700	)	$	(18,100	)

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

	2021						2020
	Amount			%			Amount			%
Income tax at U.S. federal income tax rate	$	9,700			21		$	106,700			21
State tax net of federal tax effect		(2,600	)		(5	)		(18,100	)		(4	)
Other		(13,800	)		(30	)		15,800			3
Increase in (utilization of ) operating losses		1,000			2			(122,500	)		(24	)
	$	(5,700	)		(12	)	$	(18,100	)		(4	)

The components of deferred tax assets and liabilities as of December 31, 2021 and 2020 are as follows:

	2021			2020
Deferred tax asset for NOL carryforwards	$	457,700		$	456,700
Deferred tax liability - other
Valuation allowance		(457,700	)		(456,700	)
Deferred tax liability	$	—		$	—

Our Company follows FASB ASC 740.10, which provides guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements. Recognition involves a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information.

Our Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of comprehensive income. As of January 1, 2021, our Company had no unrecognized tax benefits and no charge during 2021, and accordingly, our Company did not recognize any interest or penalties during 2021 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2021.

Tax years from 2019 through 2021 remain subject to examination by U.S. federal and state tax jurisdictions.