Income Taxes

12 Months Ended

Jun. 30, 2022

Income Taxes

Income Taxes

Note 10 -    Income Taxes

Deferred tax asset and liability consist of the following components as of June 30, 2022 and 2021:

Deferred tax asset	2022		2021
Net operating loss	$	236,800	$	432,127
Available for sale debt securities		119,187		—
Deferred loan fees		—		131,723
Accrued expenses		38,814		29,699
Other		7,038		13,304
		401,839		606,853
Deferred tax liability
Property and equipment		67,202		80,471
Allowance for loan losses		21,882		21,882
Mortgage servicing rights		215,327		163,942
Available for sale debt securities		—		70,596
Deferred loan fees		352		—
Other		256		247
		305,019		337,138
Net deferred tax asset	$	96,820	$	269,715

The provision for income taxes charged to income for the years ended June 30, 2022 and 2021, consist of the following:

	2022		2021
Current tax expense	$	74,704	$	19,300
Deferred tax expense		362,678		458,420
	$	437,382	$	477,720

In accordance with ASC Topic 740, the Company evaluates on a quarterly basis, all evidence, both positive and negative, to determine whether, based on the weight of that evidence, a valuation allowance for DTAs is needed. In conducting this evaluation, management explores all possible sources of taxable income available under existing tax laws to realize the net deferred tax asset beginning with the most objectively verifiable evidence first, including available carry back claims and viable tax planning strategies. If needed, management will look to future taxable income as a potential source. Management reviews the Company’s current financial position and its results of operations for the current and preceding years. That historical information is supplemented by all currently available information about future years. The Company understands that projections about future performance are subjective. The Company concluded no valuation allowance was necessary as of June 30, 2022 or 2021.

A summary of income taxes compared to the federal income tax statutory rate is set forth below.

	2022		2021
At Federal statutory rate at 21%	$	372,150	$	388,665
Adjustments resulting from:
Tax exempt interest		(8,579)		(13,936)
Earnings on bank owned life insurance		(47,162)		(34,580)
State tax, net of federal benefit		107,169		106,736
Other		13,804		30,835
Income tax expense	$	437,382	$	477,720

At June 30, 2022, the Company has available unused net operating loss carryforwards that may be applied against future taxable income and that expire as follows:

	Federal		State
Year of Expiration	Amount		Amount
2033	$	49,883	$	-
2034		535,607		-
2035		542,127		-
	$	1,127,617	$	-