3 - Income Taxes

12 Months Ended

Dec. 31, 2020

Notes

3 - Income Taxes

3-Income Taxes—The provision for income tax expense consists of the following:

	2020	2019
Current:
Federal……………..	$    (53,000)	$     113,000
State…………………	0	10,000
Deferred……………………………	68,000	22,000
	$    15,000	$     145,000

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

	2020		2019
	Amount	%	Amount	%
Expected tax at U.S. statutory rate…………	$    14,000	21.0	$    143,000	21.0
Permanent differences………………………	1,000	1.9	(6,000)	(1.0)
State taxes, net of federal benefit………….	0	0	8,000	1.2
Income tax expense…………………………	$    15,000	22.9	$   145,000	21.2

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

	2020	2019
Depreciation and amortization	$ (1,295,804)	$ (1,171,948)
Inventory	175,739	122,629
Accrued vacation	70,787	74,385
Allowance for doubtful accounts	38,250	31,500
Other, net	(56)	350
	$ (1,011,084)	$ (943,084)

Valuation allowances related to deferred taxes are recorded based on the “more likely than not” realization criteria.  The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions.  A deferred tax valuation allowance was not required at December 31, 2020 or 2019.