3 - Income Taxes

12 Months Ended

Dec. 31, 2021

Notes

3 - Income Taxes

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

	2021	2020
Current:
Federal	$   378,000	$    (53,000)
State	8,000	0
Deferred	(85,000)	68,000
	$   301,000	$      15,000

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

	2021		2020
	Amount	%	Amount	%
Expected tax at U.S. statutory rate	$     297,000	21.0	$    14,000	21.0
Permanent differences	(2,000)	(0.1)	1,000	1.9
State taxes, net of federal benefit	6,000	0.4	0	0
Income tax expense	$   301,000	21.3	$    15,000	22.9

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

	2021	2020
Depreciation and amortization	$ (1,196,119)	$ (1,295,804)
Inventory	157,600	175,739
Accrued vacation	74,037	70,787
Allowance for doubtful accounts	38,250	38,250
Other, net	148	(56)
	$   (926,084)	$(1,011,084)

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, 2021 or 2020.