The provision for income taxes on the statements of operations consists of $6,000 and $-0- for the years ended December 31, 2017 and 2016, respectively. Deferred tax assets are comprised of the following at December 31:
| 2017 | 2016 | |||||||
| Net operating loss carryforward | $ | 5,670,000 | $ | 5,510,000 | ||||
| Temporary differences | 540,000 | 303,000 | ||||||
| Less valuation allowance | (6,210,000 | ) | (5,813,000 | ) | ||||
| Deferred tax asset, net | $ | – | $ | – | ||||
Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes. At December 31, 2017 and 2016, management determined that realization of these benefits is not assured and has provided a valuation allowance for the entire amount of such benefits. At December 31, 2017 and 2016, net operating loss carryforwards were approximately $6,210,000 and $5,813,000, respectively, for federal tax purposes that expire at various dates from 2015 through 2032.
Utilization of net operating loss carryforwards may be subject to substantial annual limitations due to the "change in ownership" provisions of the Internal Revenue Code of 1986, as amended, and similar state regulations. The annual limitation may result in the expiration of substantial net operating loss carryforwards before utilization.
For December 31, 2017 and 2016, the provision for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate (34% in 2017 and 2016) to income taxes as follows:
| 2017 | 2016 | |||||||
| Tax provision computed at 34% | $ | 609,000 | $ | 65,000 | ||||
| Change in valuation allowance | 302,000 | 460,000 | ||||||
| Change in carryovers and tax attributes | (911,000 | ) | (525,000 | ) | ||||
| Income tax provision | $ | – | $ | – | ||||