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

Annual report pursuant to Section 13 and 15(d)

NOTE 17 - INCOME TAXES

NOTE 17 - INCOME TAXES

12 Months Ended

Dec. 31, 2014

NOTE 17 – INCOME TAXES

The Company files income tax returns in the U.S. federal jurisdiction and various states. There was no income tax expense in 2014 and 2013 due to the Company's net taxable losses. The Company had net operating loss carry forwards of approximately $5,122,000 as of December 31, 2014 available to offset taxable income through 2034. The valuation allowance increased by $236,204 in 2014. The Company has established a 100% valuation allowance. Due to the Company’s change in control that occurred on April 1, 2015 (see Note 18) the Company’s usage of its Net Operating Loss (NOL) carryforwards will be limited by Section 382 of the US Internal Revenue Service Code.

The Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years before 2011. 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 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 and thus, did not recognize any liability for unrecognized tax benefits.

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

	At December 31,
	2014			2013
Deferred tax assets:
Net operating losses	$	1,927,502		$	1,698,286
Allowance for bad debts		—			2,066
Stock options		—			6,167
Capital loss carryover		—			—
Common Stock for Services		—			—
Deferred revenue		—			—
Valuation allowance		(1,927,502	)		(1,691,298	)
Net deferred tax assets	$	—		$	15,221

Total deferred tax liabilities		—			(15,221	)
Total net deferred taxes	$	—		$	—

Reconciliation of the differences between income tax benefit computed at the federal statutory tax rate of 34% for 2014 and 2013, respectively and the provision for income taxes for the years ended December 31, 2014 and 2013 is as follows:


	Year ended December 31,
	2014			2013

Income tax expense (benefit) at federal statutory rate		(34.00	)%		(34.00	)%
State taxes, net of federal benefit		(3.63	)%		(3.63	)%
Nondeductible items		(5.5	)%		(93.37	%
Changes in valuation allowance		32.1	%		131.00	%
		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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