3 - Income Taxes

12 Months Ended

Dec. 31, 2023

Notes

3 - Income Taxes

3 - Income Taxes—The provision (benefit) for income tax expense consists of the following:

	2023	2022
Current:
Federal	$       (1,569)	$    723,000
State	(52,832)	40,000
Deferred	(1,273,027)	22,000
	$ (1,327,428)	$    785,000

The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:

	2023		2022
	Amount	%	Amount	%
Expected tax at U.S. statutory rate	$ (1,203,000)	(21.0)	$     767,000	21.0
Permanent differences	(3,428)	(0.1)	(14,000)	(0.4)
State taxes, net of federal benefit	(121,000)	(2.1)	32,000	0.9
Income tax expense (benefit)	$ (1,327,428)	(23.2)	$    785,000	21.5

The deferred tax assets (liabilites) consist of the following:

	2023	2022
Depreciation and amortization	$ (1,254,472)	$ (1,216,451)
Inventory	157,307	157,687
Accrued vacation	66,240	71,923
Allowance for credit losses	33,600	38,250
Net operating losses	1,262,621	0
Other, net	59,647	507
	$      324,943	$ (948,084)

At December 31, 2023, the Company had federal net operating loss carryforwards of approximately $6,045,000.  The net operating loss carryforwards are not subject to expiration, however are subject to annual utilization limitations for U.S. federal income tax purposes.   The Company believes it is more-likely-than-not that its deferred tax assets will be realized, based primarily on its expectation of future taxable income and considering future reversals of existing taxable temporary differences.  The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions.