NOTE 13 - INCOME TAXES

12 Months Ended

Dec. 31, 2023

Notes

NOTE 13 - INCOME TAXES

NOTE 13 – INCOME TAXES

The provision for income taxes for the year ended December 31, 2023 and 2022 consists of the following:

	December 31,		December 31,
	2023		2022
Federal
Current	$	-	$	-
Deferred		-		-
State
Current	$	800	$	800
Deferred		-		-
Income tax expense	$	800	$	800

Net deferred tax assets consist of the following components as of December 31, 2023, and 2022:

	December 31,		December 31,
	2023		2022
Deferred tax assets:
Net operating loss carryover	$	8,035,407	$	7,839,147
Research and development carry forward		131,088		131,088
Inventory reserve		221,491		222,661
Allowance for doubtful accounts		3,600		3,600
Warranty allowance		3,068		3,068
Accrued compensation		152,438		152,438
Deferred tax liabilities:
Depreciation		(34,482)		(34,066)
Valuation allowance		(8,512,610)		(8,317,935)
Net deferred tax asset	$	-	$	-

NOTE 13 – INCOME TAXES (continued)

The income tax provision differs from the amount of income tax determined by applying the estimated U.S. federal and state income tax rate of 24% as of December 31, 2023 and December 31, 2022 to pretax income from continuing operations for the year ended December 31, 2023 and 2022 due to the following:  

	December 31,		December 31,
		2023		2022
Book income (loss)	$	(51,697)	$	(47,210)
Meals and entertainment		-		-
State tax deduction		-		-
Deferred rent		-		-
Stock/Options for services		3,786		4,402
Officer’s life ins premium		260		797
Depreciation		416		590
Accrued compensation		-		3,462
Inventory reserve		(1,170)		(955)
Valuation allowance		97,611		78,629
Net operating of carryover		(48,406)		(38,915)
Income Tax Expense	$	800	$	800

On December 21, 2017, the TCJA was enacted. Among other things, the TCJA reduces the U.S. federal corporate tax rate from 35 percent to 21 percent beginning January 1, 2018, requires companies to pay a one-time transition tax on certain previously unremitted earnings on non-U.S. subsidiaries, creates new taxes on certain foreign sourced earnings and imposes additional limitations on certain deductions, including interest expense and net operating losses arising after 2017. The Company has assessed the impact of the TCJA and is not subject to the one-time transition tax. The Company remeasured certain deferred tax assets and liabilities based on the rates that they are expected to reverse in the future, which is generally 21 percent under TCJA. The decrease in the Company’s net deferred tax assets was offset by a corresponding decrease in its valuation allowance.

At December 31, 2023, the Company had net operating loss carry forwards of approximately $8,035,407 through 2034.  No tax benefit has been reported in the December 31, 2023, financial statements since the potential tax benefit is offset by a valuation allowance of the same amount. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.