Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

9. Income Taxes

The Company did not recognize a tax provision or benefit for the years ended December 31, 2023 and 2022 due to ongoing net losses and a valuation allowance. At December 31, 2023 and 2022, the Company had net deferred tax assets which will not be realized and are fully reserved by valuation allowances.

At December 31, 2023 and 2022, the Company had net deferred tax assets principally arising from net operating loss carryforward for income tax purposes and differences in the carrying values of goodwill and intangibles between the Company’s financial statements and its income tax returns. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax assets, a valuation allowance equal to 100% of the net deferred tax asset exists at December 31, 2023 and 2022.

The components of the Company’s net deferred tax assets at December 31, 2023 and 2022 are as follows:

	2023			2022
Deferred tax asset:
Net operating loss carryforwards	$	4,198,000		$	3,981,000
Intangibles and goodwill		1,004,000			1,036,000
Investments		34,000			66,000
Other		(6,000	)		(3,000	)
Total deferred tax assets		5,230,000			5,080,000
Valuation allowance		(5,230,000	)		(5,080,000	)
Net deferred tax assets	$	-		$	-

At December 31, 2023, the Company had net operating loss carry forwards of approximately $20,000,000 for federal and state purposes, $10,000,000 of which expire between 2024 through 2040. The remaining balance of $10,000,000 will never expire but utilization is limited to 80% of taxable income in any future year. 

The reconciliation of the federal income tax rate and the Company’s tax provision (benefit) at December 31, 2023 is as follows:

	2023			2022
Provision (benefit) computed using the statutory rate:	$	(265,000	)	$	(247,000	)
Permanent differences		(15,000	)		10,000
Change in estimate		130,000			18,000
Change in valuation allowance		150,000			219,000
Total income tax provision (benefit)	$	-		$	-

The Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns and found no positions that would require a liability for uncertain income tax benefits to be recognized. The Company is subject to possible tax examinations for the fiscal years 2020 through 2023. Prior year tax attributes could be adjusted by taxing authorities. If applicable, the Company will deduct interest and penalties as interest expense on the financial statements.