| FEDERAL AND STATE INCOME TAXES |
NOTE 6 — FEDERAL AND STATE INCOME TAXES
Income tax expense consisted of the following:
Schedule of provision for income taxes
| |
|
|
|
|
|
| |
|
Year Ended
December 31,
2021 |
|
Year Ended
December 31,
2020 |
|
| State income tax: |
|
|
|
|
|
| Current, net of refund |
|
$ |
(12,800 |
) |
$ |
(17,800 |
) |
| Federal income tax: |
|
|
|
|
|
|
|
| Deferred |
|
|
1,814,418 |
|
|
(62,967 |
) |
| Current |
|
|
— |
|
|
62,967 |
|
| Income tax benefit/(expense) |
|
$ |
1,801,618 |
|
$ |
(17,800 |
) |
The reconciliation of income taxes shown in the financial statements and
amounts computed by applying the Federal expected tax rate of 21% for year 2021 and 2020 is as follows:
Schedule of reconciliation of income taxes
| |
|
|
|
|
|
| |
|
Year Ended
December 31,
2021 |
|
Year Ended
December 31,
2020 |
|
| |
|
|
|
|
|
| Loss before taxes |
|
$ |
(6,364,441 |
) |
$ |
(1,194,263 |
) |
| Income taxes computed at the federal statutory rate |
|
$ |
1,336,533 |
|
$ |
250,795 |
|
| State income and franchise tax |
|
|
(12,800 |
) |
|
(17,800 |
) |
| Permanent differences and other |
|
|
477,885 |
|
|
(250,795 |
) |
| Income tax benefit/(expense) |
|
$ |
1,801,618 |
|
$ |
(17,800 |
) |
The significant components of deferred income tax assets, net are as follows:
Schedule of components of deferred tax assets
| |
|
December 31,
2021 |
|
December 31,
2020 |
|
| |
|
|
|
|
|
| Deferred compensation cost |
|
$ |
389,981 |
|
$ |
239,036 |
|
| Depreciation and amortization |
|
|
(116,911 |
) |
|
(135,092 |
) |
| R&D credit |
|
|
142,538 |
|
|
|
|
| NOL |
|
|
1,507,982 |
|
|
|
|
| Allowance for bad debts and other |
|
|
17,664 |
|
|
21,330 |
|
| Deferred income tax assets, net |
|
$ |
1,941,254 |
|
$ |
125,274 |
|
Our U.S. federal and state income tax returns remain open to examination
for the tax years 2018 through 2021.
|