v3.26.1
NOTE 11 - INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Notes  
NOTE 11 - INCOME TAXES

NOTE 11 – INCOME TAXES

As of December 31, 2025, the Company had approximately $4,305,000 of federal and state net operating loss carryforwards (“NOLs”) available to offset future taxable income. Federal NOLs generated after 2017 are subject to indefinite carryforward but are limited to 80% of taxable income in any given period under the Tax Cuts and Jobs Act. State NOL carryforwards generally expire between 2040 and 2045. Due to the Company's cumulative losses and uncertainty regarding future profitability, a full valuation allowance has been recorded against all deferred tax assets as of December 31, 2025 and 2024.

The Company used an effective federal income tax rate of 21% and a state income tax rate of 8.84% in calculating its deferred tax assets and liabilities. The components of the Company’s net deferred tax assets are as follows:

Year Ended December 31,

2025

 

2024

Net operating loss carryforwards

$

1,284,700

 

$

842,100

Accrued payroll and compensation

 

447,000

 

 

275,900

Depreciation differences

 

54,000

 

 

42,600

Valuation allowance

 

(1,785,700)

 

 

(1,160,600)

Net deferred tax assets

$

-

 

$

-

 

The reconciliation of the expected U.S. federal income tax provision (benefit) based on the statutory rate to the Company’s recorded provision is as follows:

Year Ended December 31,

2025

 

2024

Federal statutory rate applied to pre-tax income

(loss)

$

(117,400)

 

$

(97,500)

Depreciation

 

(6,600)

 

 

(4,600)

Meals and entertainment disallowance

 

200

 

 

100

Other non-deductible expenses

 

32,800

 

 

10,300

Payroll and compensation expenses

 

54,900

 

 

38,700

Gain on extinguishment of debt

 

(52,200)

 

 

-

Change in valuation allowance

 

88,300

 

 

53,000

Total provision for income taxes

$

-

 

$

-