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Provision For Income Taxes
 3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Provision For Income Taxes

14. 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, 2022 and 2021, 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.

 

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, 2022 and 2021:

 

   March 31, 2022   March 31, 2021 
U.S. statutory rate   21%   21%
U.S. Federal income tax at statutory rate  $

(4,226

)  $177,030)
Increase (decrease) in income taxes due to:          
Non-taxable PPP loan and accrued interest recovery   -   (176,190)
Non-deductible earnout expense   

11,220

    14,700 
Non-deductible goodwill amortization   

9,989

    10,080 
Other differences   93    1,380 
Other change in valuation allowance   

(17,076

)   (27,000)
Income tax benefit  $-   $- 

 

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, 2022   December 31, 2021 
Deferred tax assets          
Reserves and accruals not currently deductible for tax purposes  $

47,622

   $50,558 
Amortizable assets   

33,950

    32,615 
Net operating loss carryforwards   

3,926,322

    3,942,488 
 Deferred tax assets   

4,007,894

    4,025,661 
Deferred tax liabilities          
Property and equipment   (224,792)   (225,484)
Net Deferred tax assets   

3,783,102

    3,800,177 
Valuation allowance   (3,783,102)   (3,800,177)
 Deferred tax assets and liabilities  $-   $- 

 

As of March 31, 2022 and December 31, 2021, we had federal net operating loss carry forwards of approximately $18,685,000 and $18,762,000, respectively, which can be used to offset future federal income tax. A portion of the federal and state net operating loss carry forwards expire at various dates through 2040, and a portion of the net operating loss carry forwards have an indefinite carry forward period. We recorded a valuation allowance against all of our deferred tax assets as of both December 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.