Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

7 . Income Taxes

The provision for income taxes consist of the following for the year ended

December 31:

	201 9		201 8
Current state provision	$	8,247	$	800
Deferred provision
Federal		-		-
State		-		-
Total deferred provision		-		-
Total provision	$	8,247	$	800

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The major temporary differences that give rise to the deferred tax assets and liabilities include depreciation, allowances for bad debt, expense accruals, state income tax deductions and net operating losses (“NOLs”).

Deferred tax assets and liabilities consist of the following as of

December 31:

	201 9			201 8
Net operating losses	$	19,680		$	107,209
Depreciation		(18,696	)		(2,878	)
Other		24,719			16,937
Subtotal		25,703			121,268
Valuation allowance		(25,703	)		(121,268	)
Net deferred tax asset	$	-		$	-

A reconciliation of the Company's actual effective tax rate to the federal statutory tax rate of

21%

is as follows for the years ended

December 31, 2019,

and

2018:

	201 9			201 8
	%			%
Federal tax (benefit), net		21.0	%		-21.0	%
State tax (benefit)		7.0	%		-8.8	%
Valuation allowance		-25.0	%		27.5	%
		3.0	%		-2.3	%

As of

December 31, 2019,

the Company has federal NOL carryovers of approximately

$94,000.

If unused, the carryovers will begin to expire in

2034.

A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than

not

that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company's history of operating losses, lack of taxable income, and the accumulated deficit, the Company provided a full valuation allowance against its deferred tax assets resulting from the accruals and reserves along with the net operating losses carried forward. The change in the valuation allowance was

$95,565

and

$9,522

for the years ended

December 31, 2019

and

2018,

respectively.