The components of the income tax (provision) benefit for the years ended
December 31,
were as follows:
| | | | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Federal | | $ | 1,851,821 | | | $ | 1,142,968 | |
| State | | | 392,695 | | | | 131,774 | |
| | | | | | | | | |
| Total | | | 2,244,516 | | | | 1,274,742 | |
| | | | | | | | | |
Deferred tax benefit (expense): | | | | | | | | |
| Federal | | | 337,841 | | | | (73,928 | ) |
| State | | | 71,642 | | | | (13,955 | ) |
| | | | | | | | | |
| Total | | | 409,483 | | | | (87,883 | ) |
| | | | | | | | | |
| Total Income Tax Benefit Before Valuation Allowance | | | 2,653,999 | | | | 1,186,859 | |
| | | | | | | | | |
| Valuation allowance | | | (2,653,999 | ) | | | (1,186,859 | ) |
| | | | | | | | | |
| Total Income Tax Benefit | | $ | - | | | $ | - | |
| | | | | | | | | |
| Deferred tax assets: | | | | | | | | |
| Net operating loss carryforward | | $ | 3,371,560 | | | $ | 1,554,785 | |
| Less valuation allowance | | | (3,371,560 | ) | | | (1,554,785 | ) |
| | | | | | | | | |
| Total Deferred Tax Assets | | $ | - | | | $ | - | |
The Tax Cuts and Jobs Act was signed into law on
December 22, 2017,
and changed many aspects of U.S. corporate income taxation. Included in those changes was a reduction of the corporate income tax rate from
34%
to
21%.
The valuation allowance was adjusted to reflect the impact of the new tax law. We will continue to assess our provision for income taxes as future guidance is issued but do
not
currently anticipate significant revision will be necessary.
A
t
December 31, 2017,
we have available tax operating loss carry forwards of approximately
$9.5
million. Such carry forwards
may
be applied against future taxable income and expire in
2035
through
2037.
The amount and ultimate realization from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect,
our future earnings, and other future events, the effects of which cannot be determined.
At
December 31,
201
7,
we had recorded a valuation allowance of
$3,371,560
to fully offset the deferred tax asset. The change in the valuation allowance for the year ended
December 31, 2017
was
$1,816,776.
We have provided a valuation allowance on our net deferred tax assets where it is more likely than
not
such assets will
not
be realized. We maintain certain deferred tax liabilities that cannot be used to offset deferred tax assets and, therefore, do
not
consider these attributes in evaluating the realizability of our deferred tax assets. Deferred income tax expense or benefits are based upon the changes in the asset or liability from period to period.
The reconciliation of the provision (benefit) for income taxes computed at the U.S. federal and state tax rates to
our effective tax rate for the years ended
December 31, 2017
and
2016
is as follows:
| | | | |
| | | | | | | |
| | | | | | | | | |
| Federal provision (benefit) at statutory rates | | | (34 | )% | | | (34 | )% |
| Change in tax laws | | | 13 | % | | | 0 | % |
| State provision (benefit) at statutory rates | | | (7 | )% | | | (4 | )% |
| Change in valuation allowance | | | 28 | % | | | 38 | % |
| | | | | | | | | |
| Total | | | 0 | % | | | 0 | % |
At
December 31, 2017
and
2016,
we have
no
tax positions for which the ultimate deductibility is highly uncertain nor is there uncertainty about the timing of such deductibility.