(8) Income Taxes

12 Months Ended

Dec. 28, 2019

Income Tax Disclosure [Abstract]

(8) Income Taxes

(8) Income Taxes

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

		2019		2018
Current
Federal	$	(33,874)	$	(67,956)
State		456		456
Current income tax provision (benefit):		(33,418)		(67,500)
Deferred:
Federal		(6,387)		2,285,758
State		45,261		566,161
Deferred income tax provision (benefit), net		38,874		2,851,919
Total	$	5,456	$	2,784,419

Deferred tax assets as of December 28, 2019 and December 29, 2018 are as follows:

		December 28, 2019		December 29, 2018
Deferred Tax Assets:
Net operating loss carryforwards	$	884,508	$	738,213
Stock compensation		543,614		524,893
Credit carryforwards		1,317,445		1,365,068
Inventory		316,943		281,192
Accrued liabilities		18,920		21,615
Depreciation		237,449		215,936
Other		2,732		2,985
Gross deferred tax assets		3,321,611		3,149,902
Valuation allowance		3,173,738		2,963,155
Net deferred tax assets	$	147,873	$	186,747

At December 28, 2019 and December 29, 2018 the Company had net operating loss carryforwards of approximately $3,278,463 and $2,742,700, respectively, available to offset future income for U.S. Federal income tax purposes.

The Company established a valuation reserve as it is judged more likely than not that all or a portion of the tax credits will not be used before they expire. This decision was initially reached in 2018 after giving greater weight to its losses over the last three years compared with its forecast of the future.

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

		2019		2018
Balance at beginning of year	$	3,150,155	$	3,038,666
Deferred tax benefit (provision)		171,456		111,236
Valuation allowance		(3,173,738)		(2,963,155)
Balance at end of year	$	147,873	$	186,747

Income tax expense is different from the amounts computed by applying the U.S. federal statutory income tax rate of 21 percent to pretax income as a result of the following:

		2019		2018
Tax at statutory rate	$	(125,527)	$	(193,000)
State tax, net
of federal benefit		360		450
Net operating loss and
credit carryforwards		153,204		(68,857)
Valuation allowance		210,836		2,962,902
Other		(233,417)		82,924
Total	$	5,456	$	2,784,419

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 2016 through 2019.