Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

Note 11. Income Taxes

The components of the income tax provision for the years ended December 31, 2012 and 2011 are as follows:

	2012		2011
Current:
Federal	$	513,000	$	179,000
State		5,000		0
Deferred:
Federal		31,000		12,000
State		7,000		2,000
Total Federal and State Income Taxes	$	556,000	$	193,000

The provision for income taxes for the years ended December 31, 2012 and 2011 differs from the amount obtained by applying the U.S. federal income tax rate to pretax income due to the following:

	2012		2011
Computed “Expected” Federal Tax Expense	$	560,000	$	251,000
Increase (Decrease) in Taxes Resulting From:
State Income Taxes, net of Federal Benefit		26,000		12,000
Credits		(16,000)		(51,000)
Domestic Production Activities Deduction		(20,000)		(22,000)
Permanent Differences		6,000		3,000
Total Federal and State Income Taxes	$	556,000	$	193,000

The components of the net deferred tax liability consist of:

	2012		2011
Deferred Tax Assets:
Vacation Disallowance	$	26,000	$	24,000
Allowance for Doubtful Accounts		4,000		4,000
State Carryforward R&D Credit		0		3,000
Total Deferred Tax Assets	$	30,000	$	31,000
Deferred Tax Liabilities:
Prepaid Expenses	$	23,000	$	26,000
Depreciation		100,000		60,000
Net Unrealized Gain on Investments		1,362,000		1,170,000
Total Deferred Tax Liabilities	$	1,485,000	$	1,256,000
Net Deferred Tax Liability	$	(1,455,000)	$	(1,225,000)

The Company is subject to the following material taxing jurisdictions: U.S. and Minnesota.  The tax years that remain open to examination by the Internal Revenue Service are 2009 through 2012. The tax years that remain open to examination by the Minnesota Department of Revenue are 2008 through 2012. We have no accrued interest or penalties related to uncertain taxpositions as of January 1, 2012 or December 31, 2012.