7. Provision for Income Taxes	6 Months Ended
Jun. 30, 2018
Notes to Financial Statements
7. Provision for Income Taxes	For interim financial reporting, we estimate the effective tax rate for tax jurisdictions which is applied to the year to date income before taxes. For the three months ended June 30, 2018, our effective tax rate was 7%. We recognized a $224,000 reduction in taxable income for the three months ended June 30, 2018 from net operating loss carry-forwards expected to be realized during 2018 which resulted in $26,000 of tax benefits. For the six months ended June 30, 2018, our effective tax rate was 14%. We recognized a $448,000 reduction in taxable income for the six months ended June 30, 2018 from net operating loss carry-forwards expected to be realized during 2018 which resulted in $66,000 of tax benefits. As of June 30, 2018, the Company had federal and state net operating loss carry-forwards of $22,881,000 and $16,058,000, respectively, which expire between 2029 and 2036. Utilization of the Company’s net operating loss carry-forwards is subject to annual limitations of approximately $900,000 per year under Internal Revenue Code Section 382 due to a previous change in ownership. Due to the cumulative previous losses incurred by the Company, the Company is unable to conclude it is more likely than not that it will realize its deferred tax assets in excess of the deferred tax liability. Accordingly, the Company has recorded a valuation allowance to fully offset such amounts as of December 31, 2017 and as of June 30, 2018.

7. Provision for Income Taxes

6 Months Ended

Jun. 30, 2018

For interim financial reporting, we estimate the effective tax rate for tax jurisdictions which is applied to the year to date income before taxes. For the three months ended June 30, 2018, our effective tax rate was 7%. We recognized a $224,000 reduction in taxable income for the three months ended June 30, 2018 from net operating loss carry-forwards expected to be realized during 2018 which resulted in $26,000 of tax benefits. For the six months ended June 30, 2018, our effective tax rate was 14%. We recognized a $448,000 reduction in taxable income for the six months ended June 30, 2018 from net operating loss carry-forwards expected to be realized during 2018 which resulted in $66,000 of tax benefits.

As of June 30, 2018, the Company had federal and state net operating loss carry-forwards of $22,881,000 and $16,058,000, respectively, which expire between 2029 and 2036. Utilization of the Company’s net operating loss carry-forwards is subject to annual limitations of approximately $900,000 per year under Internal Revenue Code Section 382 due to a previous change in ownership.

Due to the cumulative previous losses incurred by the Company, the Company is unable to conclude it is more likely than not that it will realize its deferred tax assets in excess of the deferred tax liability. Accordingly, the Company has recorded a valuation allowance to fully offset such amounts as of December 31, 2017 and as of June 30, 2018.