PROVISION FOR FEDERAL AND STATE INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 7: PROVISION FOR FEDERAL AND STATE INCOME TAXES

The Company’s provision (benefit) for income taxes was as follows:

	2018			2017
Current Federal Taxes	$	106,157		$	168,909
Current State Taxes		-			17,701
Current Provision		106,157			186,610
Deferred Federal Taxes		(166,234	)		(38,667	)
Deferred State Taxes		(43,537	)		(4,128	)
Deferred Provision		(209,771	)		(42,795	)
Total Provision (Benefit)	$	(103,614	)	$	143,815

The income tax provision (benefit) differs from the amount of tax determined by applying the Federal statutory rate as follows:

	2018			2017
Statutory tax	$	(150,680	)	$	155,934
State income tax, net of federal tax		(39,464	)		16,648
Nondeductible expenses		60,342			6,390
Change in deferred taxes due to  enacted changes in tax law		-			(35,148	)
Other		26,188			(9	)
	$	(103,614	)	$	143,815

Net deferred tax assets and liabilities were comprised of the following:

	2018			2017
Current deferred tax assets (liabilities):
Allowance for Sales Returns and Related Provision for Return of Finished Goods	$	67,268		$	103,523
Inventory Valuation		277,475			184,580
Prepaid Expenses		(49,403	)		(98,653	)
Net Operating Loss		105,384			-
Charitable Contribution		1,413			-
Total deferred tax assets	$	402,137		$	189,450
Non current deferred tax liabilities:
Tax over Book Depreciation and Amortization	$	(276,053	)	$	(273,137	)
Total deferred tax liabilities – noncurrent	$	(276,053	)	$	(273,137	)
Net deferred tax asset (liability)	$	126,084		$	(83,687	)

As of December 31, 2018 and 2017, we do not expect that any of the tax positions taken by the Company, if challenged, would result in a significant tax liability.