Duos Technologies Group, Inc. Annual report pursuant to section 13 and 15(d)

Annual report pursuant to section 13 and 15(d)

INCOME TAXES

INCOME TAXES

12 Months Ended

Dec. 31, 2013

NOTE 18 - INCOME TAXES

The Company files income tax returns in the U.S. federal jurisdiction and various states. There was no income tax expense in 2013 and 2012 due to the Company's net taxable losses. The Company had net operating loss carry forwards of approximately $4,513,000 as of December 31, 2013 available to offset taxable income through 2033. The valuation allowance increased by $854,986 in 2013. The Company has established a 100% valuation allowance.

The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2008. None of the tax years subject to examination are currently under examination by a tax authority and the Company has not received notice of the intent by any tax authority to commence an examination.

The Company adopted the provisions of FIN No. 48 on January 1, 2009. As a result of the implementation of FIN No. 48, the Company did not recognize any liability for unrecognized tax benefits, since the Company has concluded that all of its tax positions are highly certain of being upheld upon examination by federal or state tax authorities.

The significant components of the Company's deferred tax account balances are as follows:


	Year ended December 31,
	2013			2012
Deferred tax assets:
Net operating losses	$	1,698,286		$	777,970
Allowance for bad debts		2,066			-
Stock options		6,167			-
Capital loss carryover		-			10,496
Common Stock for Services		-			10,000
Deferred revenue		-			38,445
Valuation allowance		(1,691,298	)		(835,637	)
Net deferred tax assets	$	15,221		$	1,274

Total deferred tax liabilities		(15,221	)		(1,274	)
Total net deferred taxes	$	-		$	-

Reconciliation of the differences between income tax benefit computed at the federal statutory tax rate of 34% and 15% for 2013 and 2012, respectively and the provision for income tax benefit for the years ended December 31, 2013 and 2012 is as follows:


	Year ended December 31,
	2013			2012

Income tax (loss) at federal statutory rate		(34.00	)%		(15.00	)%
State taxes, net of federal benefit		(3.63	)%		(4.08	)%
Nondeductible items		(93.37	)%		12.90	%
Changes in valuation allowance		131.00	%		6.18	%
		0.00	%		0.00	%

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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