v3.23.1
Income Tax
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAX

NOTE 14 – INCOME TAX

 

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Net deferred tax assets consist of the following components as of December 31:

 

   2022   2021 
Deferred Tax Assets:        
NOL Carryover  $5,913,700   $2,431,700 
Allowance for Doubtful Accounts   10,300    10,300 
Depreciation and amortization   (927,730)   687,605 
Less valuation allowance   (4,986,270)   (3,129,605)
Net deferred tax assets  $
—
   $
—
 

 

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pre-tax income from continuing operations for the period ended December 31, due to the following:

 

   2022   2021 
Book loss  $(1,635,000)  $(1,045,000)
State taxes   (467,000)   (299,000)
Meals and entertainment   2,200    1,800 
Stock based compensation   168,400    124,500 
Non deductible expenses   84,476    156,421 
Other adjustments   (9,741)   (200,332)
Valuation allowance   1,865,665    860,947 
   $
—
   $
—
 

 

At December 31, 2022, the Company had operating loss carry forwards of approximately $21,900,00, $3,200,000 of which expire from 2021 – 2040, and no expiration on the remaining amount. In accordance with Section 382 of the Internal Revenue code, the usage of the Company’s net operating loss carryforwards may be limited in the event of a change in ownership. A full Section 382 analysis has not been prepared and NOLs could be subject to limitation under Section 382.