Income Taxes

12 Months Ended

Dec. 31, 2019

Income Taxes:

Income Taxes

Note 10 – Income Taxes

Deferred income taxes are provided based on the provisions of ASC Topic 740, “Accounting for Income Taxes”, to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Significant components of the Company’s net deferred income taxes are as follows:

	December 31,
	2019			2018
Deferred tax assets
Net operating loss carryforwards	$	(1,833,083	)	$	(1,672,766	)
Start-up cost		133,424			153,964
Goodwill		319,413			363,979
Stock based compensation		556,177			535,901
Other		1,115			2,564
Deferred tax assets		2,843,212			2,729,174
Less valuation allowance		(2,843,212	)		(2,729,174	)
Net deferred tax assets after valuation allowance	$	—		$	—

A reconciliation of the U.S. statutory federal income tax rate to the effective income tax rate (benefit) follows:

Rate Reconciliation

	December 31,
	2019			2018
Federal income tax at statutory rate	$	(108,133	)	$	(142,606	)
State Tax		(18,134	)		(29,506	)
Permanent Differences		89,146			57
Other		14,217			186
Change in Valuation Allowance		22,904			171,869
Net deferred tax assets after valuation allowance	$	—		$	—

In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more than likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment. After consideration of the evidence, both positive and negative, management has determined that a $2,843,212 valuation allowance at December 31, 2019 is necessary. The change in the valuation allowance for the current year is $22,904, which represents the changes in the deferred items. At December 31, 2019, the Company has available net operating loss carry forwards for federal income tax purposes of $7,222,861 expiring at various times from 2027 through 2032.