13. Income taxes

The components of the Company's income (loss) before provision for income taxes by jurisdiction are as follows:

	Year ended December 31,

	2013			2012			2011
United States	$	537,097		$	(6,307,445	)	$	(1,570,453	)
Outside United States		(474,222	)		2,002,251			4,287,085


Income (loss) before provision for income taxes, net	$	62,875		$	(4,305,194	)	$	2,716,632

The components of the provision for income taxes are as follows:

	Year ended December 31,

	2013			2012			2011
Current tax:
United States—Federal	$	—		$	—		$	—
United States—State and local		5,754			11,056			5,111
Outside United States		619,043			417,837			326,792


Total current tax		624,797			428,893			331,903


Deferred tax:
United States—Federal		—			—			—
United States—State and local		—			—			—
Outside United States		(583,928	)		(281,782	)		—


Total deferred tax		(583,928	)		(281,782	)		—


Provision for income taxes, net	$	40,869		$	147,111		$	331,903

For 2013, the provision for income taxes of $40,869 related primarily to foreign entities. The Company has tax carryforwards in its federal, state and foreign jurisdictions. Based on all available evidence, it is not more likely than not that the Company would realize the benefit from $31.2 million of the deferred tax assets. Therefore, a valuation allowance of $29.4 million is recorded, which takes into account a deferred tax liability of $1.0 million. The Company has recorded a tax benefit for tax attribute carryforwards in the jurisdictions in which there is sufficient positive evidence that the deferred tax asset will be realized, resulting in a net deferred tax asset of $0.8 million.

For 2012, the provision for income taxes of $0.1 million related primarily to foreign entities. The Company has tax attribute carryforwards in its federal, state and foreign jurisdictions. Based on all available evidence, it is not more likely than not that the Company would realize the benefit from $29.2 million of the deferred tax assets. Therefore, a valuation allowance of $29.2 million is recorded and a deferred tax benefit of $0.2 million is recorded. The Company has recorded a tax benefit for tax attribute carryforwards in the jurisdictions in which there is sufficient positive evidence that the deferred tax asset will be realized, resulting in a net deferred tax asset of $0.2 million.

For 2011, the tax provision of $0.3 million related primarily to foreign entities. The Company has tax attribute carryforwards in its federal, state and foreign jurisdictions that based on all available evidence it is not more likely than not that the Company would realize the benefit from a significant portion of the deferred tax assets. Therefore, a full valuation allowance is recorded on these deferred tax assets and no deferred tax provision or benefit is recorded. There are no tax attribute carryforwards in the jurisdictions that are currently generating income.

The table below shows reconciliation from the U.S. Federal statutory income rate of 34.0% to the effective income tax rate:

	Year ended December 31,

	2013			2012			2011
Federal statutory rate		34.0	%		34.0	%		34.0	%
State tax (less than 0.2% for 2012 and 2011)		9.2			—			—
Permanent differences		54.3			(4.8	)		15.1
Foreign tax rates at rates different from U.S. rates		(82.7	)		18.8			(48.9	)
Valuation allowance		50.2			(51.4	)		12.0


Total tax provision		65.0	%		(3.4	)%		12.2	%

With few exceptions, the statute of limitations for the years 2009 and prior has expired. Earlier years related to certain foreign jurisdictions remain subject to examination. There are no income tax returns currently under examination. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and may make adjustments up to the amount of the net operating loss carry forward. As of December 31, 2013 and 2012, the Company has no significant uncertain tax positions and, therefore, has not recorded any significant liabilities, interest or penalties for uncertain tax positions. To the extent that the Company records any interest or penalties, these amounts will be recorded as part of the income tax provision. If the Company's positions are sustained by the taxing authorities, there will be no impact to the Company's income tax provision. There were no significant changes to the Company's unrecognized tax benefits during the year ended December 31, 2013, and the Company does not anticipate any other significant changes to the unrecognized tax benefits during the next twelve months.

The components of deferred tax assets and liabilities are as follows:

	As of December 31,

	2013			2012
Deferred tax assets:
Net operating loss carry-forwards	$	27,188,180		$	26,186,094
Stock options		3,514,890			3,312,860
Bonuses and salaries		33,111			279,424
Restricted stock		73,538			—
Provision for doubtful accounts		13,703			492,002
Foreign nonrefundable withholding tax		318,163			—
Other		22,937			159,225


Total deferred tax assets		31,164,522			30,429,605


Less: Valuation allowance		(29,416,464	)		(29,238,264	)


Net deferred tax assets		1,748,058			1,191,341


Deferred tax liabilities:
Depreciation and amortization		(981,816	)		(1,008,449	)


Total deferred tax liabilities		(981,816	)		(1,008,449	)


Total deferred tax assets, net(*)	$	766,242		$	182,892

(*): As of December 31, 2013 and 2012, deferred tax assets, net, are included in the balance sheet classification "Security deposits and other assets".

As of December 31, 2013, the Company has available federal net operating loss carryforwards of $70.4 million, state net operating loss carryforwards, primarily New York State, of $71.3 million, and various foreign net operating loss carryforwards, the most significant of which expire from 2020 through 2033.

The Company assesses the recoverability of its net operating loss carryforwards and other deferred tax assets and records a valuation allowance to the extent recoverability does not satisfy the "more likely than not" recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2013, the Company had a valuation allowance totaling $29.4 million against its deferred tax assets, net of deferred tax liabilities, due to insufficient positive evidence, primarily consisting of historical losses within the taxing jurisdictions that have tax attributes and deferred tax assets.