Income Taxes

12 Months Ended

Dec. 28, 2013

Income Tax Disclosure [Abstract]

Income Taxes

(8) Income Taxes

Components of income tax expense (benefit) for each year are as follows:

	2013		2012		2011
Current
Federal	$	33,777	$	—	$	95,217
State		456		456		(37,445)
Current income tax provision:		34,233		456		57,772
Deferred:
United States:
Federal		379,574		(1,165,700)		(274,962)
State		48,900		(140,456)		(105,576)
Deferred income tax provision (benefit), net		428,474		(1,306,156)		(380,538)
Total	$	462,707	$	(1,305,700)	$	(322,766)

Deferred tax assets as of December 28, 2013 and December 29, 2012 are as follows:

	December 28, 2013		December 29, 2012
Deferred Tax Assets:
Net operating loss
carryforwards	$	734,000	$	1,227,000
Stock compensation		343,000		250,000
Credit carryforwards		859,000		665,000
Inventory		319,000		328,000
Accrued liabilities		39,000		23,000
Depreciation		177,000		289,000
Other		5,000		5,000
Gross deferred tax assets		2,476,000		2,787,000
Valuation allowance		—		—
Net deferred tax assets	$	2,476,000	$	2,787,000

At December 28, 2013 and December 29, 2012, the Company had net operating loss carryforwards of approximately $1,710,000 and $3,303,000 respectively available to offset future income for U.S. Federal income tax purposes. These operating loss carryforwards expire in varying amounts through 2032.

During 2013, the Company utilized approximately $1,300,000 of net operating loss carryforwards.

A valuation allowance is required to be established or maintained when it is "more likely than not" that all or a portion of deferred tax assets will not be realized. The Company believes that it will generate sufficient future taxable income to realize the tax benefits related to the remaining deferred tax assets.

A summary of the change in the deferred tax asset is as follows:

		2013		2012		2011
Balance at beginning of year	$	2,786,973	$	1,480,817	$	1,100,279
Deferred tax (expense) benefit		(311,071)		1,306,156		380,538
Balance at end of year	$	2,475,902	$	2,786,973	$	1,480,817

Income tax (benefit) expense is different from the amounts computed by applying the U.S. federal statutory income tax rate of 34 percent to pretax income as a result of the following:

		2013		2012		2011
Tax at statutory rate	$	486,000	$	(961,000)	$	(125,000)
State tax, net
of federal benefit		33,000		(140,000)		(94,000)
Net operating
loss and credit carryforwards		(60,000)		(218,000)		(95,000)
Other		4,000		13,000		(9,000)
Total	$	463,000	$	(1,306,000)	$	(323,000)

The Company’s income tax filings are subject to review and examination by federal and state taxing authorities. The Company is currently open to audit under the applicable statutes of limitations for the years 2010 through 2013.

At December 28, 2013 the Company’s Deferred Tax Asset included net operating loss carryforwards and other temporary differences which will require taxable income of approximately $6.3 million to fully utilize, assuming an effective corporate tax rate of 39%. The Company has concluded that it is more likely than not that its Deferred Tax Asset will be fully realized.