Income Taxes

12 Months Ended

May 31, 2016

NOTE 4 - INCOME TAXES

For tax purposes as of May 31, 2016, the Company has United States federal and state (New York and Florida) net operating loss (NOL) carryovers which are available to offset future taxable income These NOL carryovers expire follows:

		Federal				State
Fiscal Year Generated		Fiscal Year of Expiration		Amount		Fiscal Year of Expiration		Amount

	2011			$	-		2031	$	62,389
	2012				-		2032		50,280
	2014		2034		225,808		2034		89,370
	2015		2035		125,944		2035		127,018
				$	351,752			$	329,057

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Components of the Company’s deferred tax asset are as follows as of May 31:

	2016			2015
Deferred tax asset - net operating loss carryovers	$	72,506		$	117,589
Deferred tax asset – allowance for doubtful accounts		12,748			7,157
Deferred tax asset - accrued expenses		124,364			141,865
Valuation allowance		(209,618	)		(266,611	)
Net deferred tax asset	$	-		$	-

The Company periodically evaluates whether it is more likely than not that it will generate sufficient taxable income to realize the deferred income tax asset. The ultimate realization of this asset is dependent upon the generation of future taxable income sufficient to offset the related deductions. At the present time, management cannot presently determine when the Company will be able to generate sufficient taxable income to realize the deferred tax asset; accordingly, a valuation allowance has been established to offset the assets. The net change in valuation allowance was a decrease of $56,993 in 2016 and an increase of $59,524 in 2015.

The reconciliation of income tax benefit attributable to continuing operations computed at the U.S. federal statutory tax rates to the income tax benefit recorded is as follows:

	Year Ended May 31,
	2016			2015
Income tax at U.S. statutory rate of 15%	$	19,305		$	(43,658	)
State income taxes, net of federal benefit		7,722			(15,866	)
Change in estimate		29,966			-
(Decrease) Increase in valuation allowance		(56,993	)		59,524
Income tax benefit	$	-		$	-

Profit Planners Management, Inc. 10-K