INCOME TAXES

3 Months Ended

Dec. 31, 2024

NOTE 11 - INCOME TAXES

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

In assessing the need for a valuation allowance, management must determine that there will be sufficient taxable income to allow for the realization of deferred tax assets. Based upon the historical and anticipated future income, management has determined that the deferred tax assets do not meet the more-likely-than-not threshold for realizability. Accordingly, there is a full valuation allowance provided against the Company’s deferred tax assets as of December 31, 2024 and September 30, 2024.

A reconciliation of the provision for income taxes determined at the U.S. statutory rate to the Company’s effective income tax rate is as follows:

	Three months ended December 31, 2024			Three months Ended December 31, 2023
Pre-tax loss	$	(687,143	)	$	(1,059,128	)
U.S. federal corporate income tax rate		21	%		21	%
Expected U.S. income tax credit		(144,300	)		(222,417	)
Permanent differences		54,394			125,898
Change of valuation allowance		89,906			96,519
Effective tax expense	$	—		$	—

The Company had deferred tax assets as follows:

	December 31, 2024			September 30, 2024
Net operating losses carried forward	$	2,535,257		$	2,445,350
Less: Valuation allowance		(2,535,257	)		(2,445,350	)
Net deferred tax assets	$	—		$	—

As of December 31, 2024, and September 30, 2024, the Company has approximately $12,073,000 and $11,645,000, respectively, net operating loss carryforwards available to reduce future taxable income. As of December 31, 2024, and September 30, 2024, the Company has no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods and does not believe that there will be any significant increases or decreases of unrecognized tax benefits within the next twelve months. No interest or penalties relating to income tax matters have been imposed on the Company during the three months ended December 31, 2024, and 2023, and no provision for interest and penalties is deemed necessary as of December 31, 2024, and September 30, 2024.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

CYTTA CORP. 10-Q