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Provision for Income Taxes | 3 Months Ended
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Mar. 31, 2021
Income Tax Disclosure [Abstract] |
Provision for Income Taxes |
17. | Provision For Income Taxes
The Company files income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. For the three months ended March 31, 2021 and 2020, we have recognized the minimum amount of state income tax as required by the states in which we are required to file taxes. We are not currently subject to further federal or state tax since we have incurred losses since our inception. Income tax benefit consists of the following Federal, deferred components for the three months ended March 31, 2020:
|  | March 31, 2020 |
Benefit of net operating losses |  | $ | (72,541 | )
Other timing differences |  |  | (91,770 |
Change in valuation allowance, including $188,000 reduction in valuation allowance due to purchased deferred tax liability |  |  | (23,989 |
Tax benefit |  | $ | (188,300 |
A reconciliation is provided below of the U.S. Federal income tax expense at a statutory rate of 21% for the three months ended March 31, 2021 and 2020:
|  | March 31, 2021 |  |  | March 31, 2020 |
U.S. statutory rate |  |  | 21 | % |  |  | 21 | %
U.S. Federal income tax at statutory rate |  | $ | 177,030 |  |  | $ | (175,247 | )
Increase (decrease) in income taxes due to: |  |  |  |  |  |  |  |
Non-taxable PPP loan and accrued interest recovery |  |  | (176,190 | ) |  |  | - |
Non-deductible earnout expense |  |  | 14,700 |  |  |  | - |
Non-deductible goodwill amortization |  |  | 10,080 |  |  |  | 3,329 |
Other differences |  |  | 1,380 |  |  |  | - |
Benefit of acquisition-date purchased deferred tax liability |  |  | - |  |  |  | (188,300 | )
Other change in valuation allowance |  |  | (27,000 | ) |  |  | 171,918 |
Income tax benefit |  | $ | - |  |  | $ | (188,300 | )
The approximate tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:
|  | March 31, 2021 |  |  | December 31, 2020 |
Deferred tax assets |  |  |  |  |  |  |  |
Reserves and accruals not currently deductible for tax purposes |  | $ | 49,000 |  |  | $ | 51,000 |
Amortizable assets |  |  | 69,000 |  |  |  | 72,000 |
Net operating loss carryforwards |  |  | 3,990,000 |  |  |  | 4,020,000 |
|  |  | 4,108,000 |  |  |  | 4,143,000 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Property and equipment |  |  | (135,000 | ) |  |  | (143,000 | )
Net Deferred tax assets |  |  | 3,973,000 |  |  |  | 4,000,000 |
Valuation allowance |  |  | (3,973,000 | ) |  |  | (4,000,000 | )
|  | $ | - |  |  | $ | - |
As of March 31, 2021 and December 31, 2020, we had federal net operating loss carry forwards of approximately $18,988,000 and $19,129,000, respectively, which can be used to offset future federal income tax. The federal and state net operating loss carry forwards expire at various dates through 2039 for pre-2020 losses. 2020 losses are indefinite in life. We recorded a valuation allowance against all of our deferred tax assets as of both March 31, 2021 and December 31, 2020. We intend to continue maintaining a full valuation allowance on our deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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