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Income Taxes

12 Months Ended

Dec. 31, 2018

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,
		2018				2017
Deferred tax assets:

Net operating loss carryforwards		$	1,672,766			$	1,557,027
Start-up cost			153,964				174,679
Goodwill			363,979				408,552
Stock based compensation			535,901				414,080
Other			2,564				2,972
Deferred tax assets			2,729,174				2,557,309
Less valuation allowance			(2,729,174	)			(2,557,309	)
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,
		2018				2017

Federal income tax at statutory rate		$	(142,606	)		$	137,480
State Tax			(29,506	)			14,678
Permanent Differences			57				433
Other			186				(1,285	)
Change in Valuation Allowance			171,869				(151,306	)
		$	—			$	—

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 $2,729,174 valuation allowance at December 31, 2018 is necessary. The change in the valuation allowance for the current year is $171,869, which represents the changes in the deferred items. At December 31, 2018, the Company has available net operating loss carry forwards for federal income tax purposes of $6,590,323 expiring at various times from 2028 through 2033.

Valuation and Qualifying Accounts

Description		Balance at Beginning of Period				Charged to Cost and Expenses				Write-offs				Other Charges				Balance at End of Period

Deferred tax asset valuation allowance

Year ended December 31, 2018		$	2,557,309			$	171,868				—			$	—			$	2,729,177
Year ended December 31, 2017		$	4,063,436			$	(1,506,127	)			—			$	—			$	2,557,309