Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 6. INCOME TAXES

The income tax provision (benefit) consists of the following for the years ended December 31:

	2019			2018
Current tax expense	$	189,000		$	214,000
Deferred tax (benefit)		(12,000	)		39,000
Total income tax expense	$	177,000		$	253,000

The reconciliation between expected federal income tax rates and the Company's effective federal tax rates is as follows: 

	2019						2018
	Amount			Percent			Amount			Percent
Expected federal tax	$	208,500			21.0	%	$	161,300			21.0	%
Permanent differences		(1,700	)		(0.2	%)		9,100			1.2	%
State income tax, net of federal tax benefit		22,200			2.2	%		30,900			4.0	%
Foreign tax credit		0			0.0	%		(3,100	)		(0.4	%)
Research and Development tax credit		(29,000	)		(2.9	%)		0			0.0	%
Other		(23,000	)		(2.3	%)		54,800			7.1	%
Total	$	177,000			17.8	%	$	253,000			32.9	%

The following table summarizes the Company's deferred tax assets and liabilities at December 31:

	2019			2018
Current deferred tax asset (liabilities):
Accounts payable and accrued expenses	$	73,000		$	82,000
Accounts receivable		(1,156,000	)		(1,026,000	)
Allowance for doubtful accounts		43,000			46,000
Prepaid expenses		(88,000	)		(75,000	)
Deferred revenue		551,000			376,000
Net current deferred tax liability		(577,000	)		(597,000	)
Long-term deferred tax asset (liabilities):
NOL - federal		-			-
NOL - State		7,000			4,000
Foreign tax credit		40,000			38,000
Book - Tax depreciation		(13,000	)		0
Net long-term deferred tax asset		34,000			42,000
Net deferred tax liability	$	(543,000	)	$	(555,000	)

The company has various state net operating loss carryforwards of approximately $91,000 which expire between 2026 and 2035 if not used.  An allowance for net operating loss carryforward is recorded when the Company believes the amount may not be collected or fully utilized.  Management believes the state net operating loss carryforward is fully collectible or will be fully utilized.