Quarterly report pursuant to Section 13 or 15(d)

Income Taxes (Tables)

v3.21.1
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2021
Income Tax Disclosure [Abstract]  
Components of Provision for Income Taxes

Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the three months ended March 31, 2021 and March 31, 2020) are as follows:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2021

 

 

March 31, 2020

 

Current tax benefit

 

 

 

 

 

 

 

 

Federal

 

$

911,648

 

 

$

(148,257

)

State

 

 

188,624

 

 

 

(30,675

)

Total current tax benefit

 

 

1,100,272

 

 

 

(178,932

)

Deferred tax expense

 

 

8,214

 

 

 

39,257

 

Valuation allowance (expense)

 

 

(1,105,002

)

 

 

139,675

 

Income tax (reduction) benefit

 

$

3,484

 

 

$

-

 

Schedule of Reconciliation of Tax Provision with Expected Provision

The reconciliation of the income tax computed at the combined federal and state statutory rate of 25.3% for the three months ended March 31, 2021 and 2020 to the income tax benefit is as follows:

 

 

 

Three Months Ended March 31,

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2021

 

 

2020

 

 

2020

 

Expense (benefit) on net loss

 

$

1,107,447

 

 

 

25.3

%

 

$

(139,675

)

 

 

28.3

%

Nondeductible expenses

 

 

1,039

 

 

 

0.0

%

 

 

-

 

 

 

(13.90

)%

Valuation allowance (expense)

 

 

(1,105,002

)

 

 

(25.3

)%

 

 

139,675

 

 

 

(14.30

)%

Other items

 

 

-

 

 

 

0.0

%

 

 

-

 

 

 

0.0

%

Tax expense/ effective rate

$

 

3,484

 

 

 

-

%

 

 

-

 

 

 

-

%

 

Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax liabilities and assets as of March 31, 2021 and December 31, 2019 are as follows: 

 

 

 

 

 

 

As of March 31, 2021

 

 

As of December 31, 2020

 

 

 

(Unaudited)

 

 

 

 

Deferred tax liabilities:

 

 

 

 

 

 

 

 

Tax expense for internally developed software

 

$

-

 

 

$

(1,814

)

Tax depreciation in excess of book

 

 

-

 

 

 

(2,917

)

Total deferred tax liabilities

 

 

-

 

 

 

(4,731

)

Deferred tax assets:

 

 

 

 

 

 

 

 

Loss carryforwards

 

 

2,810,664

 

 

 

3,913,579

 

Step up in basis at contribution to C-Corp

 

 

529,302

 

 

 

511,052

 

Stock option expense

 

 

124,876

 

 

 

124,876

 

Step up in basis - purchase of non-controlling interest

 

 

48,789

 

 

 

49,950

 

Allowance for credit losses

 

 

33,466

 

 

 

33,466

 

Accrued liabilities

 

 

-

 

 

 

20,573

 

Total deferred tax asset

 

 

3,547,097

 

 

 

4,653,496

 

Valuation allowance

 

 

(3,550,581

)

 

 

(4,658,226

)

Net deferred tax asset

 

$

(3,484

)

 

$

-