Note 9. INCOME TAXES
The Company's deferred tax asset consists primarily of carryforward net operating losses (NOLs). The Company believes that, at this time, it is more likely than not that the benefit of the NOLs will not be realized and has therefore recorded a full valuation allowance. The following represents the NOLs incurred by the Company on a per year basis and the resulting estimated deferred tax asset and valuation allowance:
| Year Ended December 31, | Net Operating Loss | Estimated Deferred Tax Asset | ||||||
| 2010 | $ | 4,457 | $ | 1,917 | ||||
| 2011 | 34,325 | 14,760 | ||||||
| 2012 | 174,024 | 74,830 | ||||||
| 2013 | 114,267 | 49,135 | ||||||
| 2014 | 294,880 | 126,798 | ||||||
| 2015 | 121,619 | 52,296 | ||||||
| 2016 | 382,095 | 164,301 | ||||||
| Total | $ | 1,125,667 | $ | 484,037 | ||||
| Less: Valuation Allowance | $ | (484,037 | ) | |||||
| Net Deferred Tax Asset | $ | - | ||||||
The income tax benefit differs from the amount computed by applying the statutory federal and state income tax rates to the loss before income taxes. The sources and tax effects of the differences are as follows:
| December 31, 2016 | December 31, 2015 | |||||||
| Statutory federal income tax rate | 34 | % | 34 | % | ||||
| State income taxes, net of federal taxes | 9 | % | 9 | % | ||||
| Valuation allowance | (43 | )% | (43 | )% | ||||
| Effective income tax rate | 0 | % | 0 | % | ||||
As of December 31, 2016, the Company has a net operating loss carryforward of approximately $1,125,667 to reduce future federal taxable income which begins to expire in the year 2030. The Company is also subject to corporate taxes in the State of New Jersey which has similar net operating loss carryover provisions which start to expire in the year 2030.
The Company currently has no federal or state tax examinations in progress, nor has it had any federal or state examinations since its inception. All of the Company's open tax years beginning in tax year 2013 are subject to federal and state tax examinations.