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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 12. Income Taxes

 

A reconciliation of the Federal statutory rate (28%) to the total effective rate applicable to income (loss) is as follows:

 

         
   Year Ended   Year Ended 
   December 31,
2022		   December 31,
2021		 
         
Expected benefit at statutory federal tax rate  $(974,329)  $(979,527)
Permanent differences – net   (859,515)   - 
State and local taxes, net of federal tax benefit   (265,607)   (311,373)
Other   (21,965)   (57,563)
Change in valuation allowance   2,121,416    1,348,463 
Income tax Expense (Benefit) Total  $-   $- 

 

The components of the Company’s deferred tax assets (liabilities) are as follows:

 

   Year Ended
December 31,
2022		   Year Ended
December 31,
2021		 
Deferred tax assets (liabilities):          
Fixed assets  $(268,594)  $3,837 
Interest   62,310    46,361 
Research and development expenses   454,942    - 
Stock-based compensation   917,351    637,112 
Net operating losses - federal   2,898,411    1,687,053 
Net operating losses – state and local   921,350    536,282 
Net operating losses - foreign   37,686    - 
Research credit   28,985    28,985 
Deferred tax assets gross   5,052,441    2,939,630 
Less valuation allowance   (5,244,441)   (2,939,630)
Net deferred tax liability  $(192,000)  $- 

 

The authoritative guidance, requires the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered.

 

The guidance also requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence needs to be considered, including a company’s current and past performance, the market environment in which the company operates, length of carryback and carryforward periods and existing contracts that will result in future profits. After reviewing all the evidence, the company has recorded a full valuation allowance.