Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Components of Provision for Income Taxes

Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the years ended December 31, 2021 and December 31, 2020 are as follows:

	Year Ended			Year Ended
	December 31, 2021			December 31, 2020
Current tax benefit
Federal	$	290,238		$	(955,977	)
State		35,940			(197,796	)
Total current tax expense (benefit)		326,178			(1,153,773	)
Deferred tax expense		1,126,450			130,403
Valuation allowance (expense)		(1,126,450	)		1,023,370
Income tax (reduction) benefit	$	326,178		$	-

Schedule of Reconciliation of Tax Provision with Expected Provision

The reconciliation of the income tax computed at the combined federal and state statutory rate of 27.1% for the year ended December 31, 2021 and 25.3% for the year ended December 31, 2020 to the income tax benefit is as follows:

	Year Ended December 31,						Year Ended December 31,
	2021			2021			2020			2020
Benefit on net loss	$	1,445,949			27.1	%	$	(1,024,640	)		25.3	%
Nondeductible expenses		6,678			0.1	%		1,271			—	%
Valuation allowance (expense)		(1,126,449	)		(21.1	)%		1,023,369			25.3	%
Other items		-			0.0	%		-			0.0	%
Tax expense (benefit)/effective rate	$	326,178			6.1	%	$	-			0.0	%

Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax liabilities and assets as of December 31, 2021 and December 31, 2020 are as follows:

	As of December 31,
	2021			2020
Deferred tax liabilities:
Tax expense for internally developed software	$	-		$	1,814
Deferred vendor stock compensation		(261,323	)		-
Tax depreciation in excess of book		-			2,916
Total deferred tax liabilities		(261,323	)		4,730
Deferred tax assets:
Loss carryforwards		2,101,401			3,913,579
Step up in basis at contribution to C-Corp		461,078			511,052
Stock option expense		669,959			124,876
Step up in basis - purchase of non-controlling interest		42,529			49,950
Allowance for credit losses		16,539			33,466
Unrealized loss on securities		216,284			-
Accrued liabilities		-			20,573
Total deferred tax asset		3,507,790			4,653,496
Tax rate change		-			-
Valuation allowance		(3,246,467	)		(4,658,226	)
Net deferred tax asset	$	-		$	-