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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

3. Income Taxes. The provision (benefit) for income tax expense consists of the following:

 

 

2024

 

 

2023

 

Current:

 

 

 

 

 

 

Federal

 

$

8,390

 

 

$

(1,569

)

State

 

 

1,021

 

 

 

(52,832

)

Deferred

 

 

562,815

 

 

 

(1,273,027

)

 

$

572,226

 

 

$

(1,327,428

)

 

The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:

 

 

2024

 

 

2023

 

 

Amount

 

 

%

 

 

Amount

 

 

%

 

Expected tax at U.S. statutory rate

 

$

(1,059,111

)

 

 

21.0

 

 

$

(1,203,000

)

 

 

21.0

 

Permanent differences

 

 

2,315

 

 

 

(0.1

)

 

 

1,192

 

 

 

(0.0

)

State taxes, net of federal benefit

 

 

(62,695

)

 

 

1.2

 

 

 

(121,000

)

 

 

2.1

 

Change in valuation allowance

 

 

1,640,978

 

 

 

(32.5

)

 

 

(20,036

)

 

 

0.4

 

State NOL adjustment

 

 

18,107

 

 

 

(0.4

)

 

 

—

 

 

 

—

 

Other adjustments

 

 

32,632

 

 

 

(0.6

)

 

 

15,416

 

 

 

(0.3

)

Income tax expense (benefit)

 

$

572,226

 

 

 

(11.4

)

 

$

(1,327,428

)

 

 

23.2

 

 

The deferred tax assets (liabilities) consist of the following:

 

 

2024

 

 

2023

 

Depreciation and amortization

 

$

(1,180,931

)

 

$

(1,254,472

)

Inventory

 

 

160,228

 

 

 

157,307

 

Accrued vacation

 

 

63,692

 

 

 

66,240

 

Allowance for credit losses

 

 

43,999

 

 

 

33,600

 

Net operating losses

 

 

2,221,882

 

 

 

1,398,239

 

Other, net

 

 

229,854

 

 

 

59,647

 

Gross deferred tax assets

 

$

1,538,724

 

 

$

460,561

 

Valuation allowance

 

 

(1,776,596

)

 

 

(135,618

)

Net deferred tax (liabilities) assets

 

$

(237,872

)

 

$

324,943

 

 

At December 31, 2024, the Company had federal net operating loss carryforwards of approximately $9,560,000. The net operating loss carryforwards are not subject to expiration, however are subject to annual utilization limitations for U.S. federal income tax purposes. At December 31, 2024, the Company had state net operating loss carryforwards of approximately $3,696,000, some of which are subject to expiration. The Company believes it is more-likely-than-not that its deferred tax assets will not be fully realized, based primarily on cumulative losses over the prior 3-year period. The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions.