INCOME TAXES

12 Months Ended

Dec. 31, 2018

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:

	2018		2017
Current tax expense	$	214,000	$	78,000
Deferred tax (benefit)		39,000		(244,000	)
Total income tax expense (benefit)	$	253,000	$	(166,000	)

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

	2018						2017
	Amount			Percent			Amount			Percent
Expected federal tax	$	161,300			21.0	%	$	141,800			34.0	%
Permanent differences		9,100			1.2	%		14,500			3.5	%
State income tax, net of federal tax benefit		30,900			4.0	%		11,300			2.7	%
Foreign tax credit		(3,100	)		(0.4	)%		0			0.0	%
Other		54,800			7.1	%		(12,600	)		(3.0	)%
Tax law change		0			0.0	%		(321,000	)		(77.0	)%
Total	$	253,000			32.9	%	$	(166,000	)		(39.8	)%

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

	2018			2017
Current deferred tax asset (liabilities):
Accounts payable and accrued expenses	$	82,000		$	54,000
Accounts receivable		(1,026,000	)		(1,127,000	)
Allowance for doubtful accounts		46,000			44,000
Prepaid expenses		(75,000	)		(110,000	)
Deferred revenue		376,000			554,000
Net current deferred tax liability		(597,000	)		(585,000	)
Long-term deferred tax asset:
NOL - State		4,000			24,000
Foreign tax credit		38,000			52,000
Book - Tax depreciation		0			(7,000	)
Net long-term deferred tax asset		42,000			69,000
Net deferred tax liability	$	(555,000	)	$	(516,000	)

The federal net operating loss carryforward at December 31, 2018 is $0 and the various state net operating loss carryforwards is approximately $105,000 which expires between 2025 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.