Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes

Income Taxes

Note 13: Income Taxes

The provision for income taxes consisted of the following components for the years ended December 31 (in 000’s):

	2023			2022
Current:
Federal	$	743		$	688
State		274			172
Foreign		(40	)		142
Total Current		977			1,002
Deferred:
Federal		(369	)		(202	)
State		(53	)		(37	)
Foreign		(12	)		(39	)
Total Deferred		(434	)		(278	)
Total expense for income taxes	$	543		$	724

Reconciliation between the statutory rate and the effective tax rate is as follows on December 31 (in 000's, except percentages):

	2023						2022
	Amount			Percentage			Amount			Percentage
Federal statutory tax rate	$	275			21.0	%	$	558			21.0	%
State tax rate		113			8.6	%		114			4.2	%
Permanent difference – stock-based compensation		57			4.0	%		25			1.0	%
Permanent difference – other		23			1.5	%		38			1.4	%
Foreign tax credit generated		(32	)		(2.3	)%		(96	)		(3.6	)%
Tax on foreign earnings – tax reform		32			2.3	%		96			3.6	%
Foreign rate differential		(8	)		(0.5	)%		15			0.6	%
FDII Deduction		(23	)		(1.6	)%		(26	)		(1.0	)%
Other		106			7.4	%		—			—
Total	$	543			41.5	%	$	724			27.2	%

Components of net deferred income tax assets are as follows on December 31 (in 000's):

	2023			2022			Change
Assets:
Deferred revenue	$	80		$	29		$	51
Allowance for doubtful accounts		311			185			126
Stock options		338			151			187
Transaction costs		69			41			28
IRC Section 174 capitalized costs		510			216			294
ROU lease liability		293			427			(134	)
Other		19			10			9
Total deferred tax asset		1,620			1,059			561
Liabilities
Prepaid expenses		(1	)		—			(1	)
Basis difference in fixed assets		(149	)		(155	)		6
Capitalized software		(20	)		(35	)		15
ROU Assets		(260	)		(393	)		133
Purchase of intangibles		(1,268	)		(1,048	)		(220	)
Other		(61	)		—			(61	)
Total deferred tax liability		(1,759	)		(1,631	)		(128	)
Total net deferred tax asset / (liability)	$	(139	)	$	(572	)	$	433

As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. It has been determined that is more likely than not that the Company's deferred tax assets are able to be realized based on future positive earnings and reversal of existing temporary differences.

The Company had no unrecognized tax benefits as of December 31, 2023 or December 31, 2022. Interest and, if applicable, penalties are recognized related to unrecognized tax benefits in income tax expense. There are no accruals for interest and penalties on December 31, 2023.

Undistributed earnings of the Company are insignificant as of December 31, 2023. With the enactment of the 2017 Act, the Company does not consider any of its foreign earnings as indefinitely reinvested.

The Company is subject to income taxation by both federal and state taxing authorities. Income tax returns for the years ended December 31, 2022, 2021 and 2020 are open to audit by federal and state taxing authorities.