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

8.       Income Taxes

 

At December 31, 2022, our Company had federal taxable income of approximately $799,100 after utilization of the federal net operating loss (NOL’s) carryforwards of approximately $1,174,300 that were available at December 31, 2021 to offset future taxable income. There was no provision for federal income taxes for the year ended December 31, 2021 due to the availability of NOL’s. State income taxes in 2022 resulted from limitations placed on income tax net operating loss deductions by the Commonwealth of Pennsylvania. At December 31, 2022 and December 31, 2021, our Company had state NOL’s approximating $1,792,900 and $2,638,800, respectively; 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, 2022 and December 31, 2021. Our Company has established a 100% valuation allowance of $143,400 and $457,700 at December 31, 2022 and December 31, 2021, respectively, for the deferred tax assets due to the uncertainty of their realization. The components for federal and state income tax expense are:

 

          
   Year ended December 31 
   2022   2021 
Current federal taxes  $167,800   $— 
Current state taxes   126,700    (5,700)
   $294,500   $(5,700)

 

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

 

                    
   2022   2021 
   Amount   %   Amount   % 
                 
Income tax at U.S. federal income tax rate  $442,600    21   $9,700    21 
                     
State tax net of federal tax effect   166,300    8    (2,600)   (5)
                     
Other   —    —    (13,800)   (30)
                     
Increase in (utilization of ) operating losses   (314,400)   (15)   1,000    2 
   $294,500    14   $(5,700)   (12)

 

The components of deferred tax assets and liabilities as of December 31, 2022 and 2021 are as follows:

 

          
   2022   2021 
         
Deferred tax asset for NOL carryforwards  $143,400   $457,700 
           
Deferred tax liability - other          
Valuation allowance   (143,400)   (457,700)
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, 2022, our Company had no unrecognized tax benefits and no charge during 2022, and accordingly, our Company did not recognize any interest or penalties during 2022 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2022.

 

Tax years from 2020 through 2022 remain subject to examination by U.S. federal and state tax jurisdictions.