INCOME TAXES AND AVAILABLE CARRYFORWARD

12 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES AND AVAILABLE CARRYFORWARD

NOTE K - INCOME TAXES AND AVAILABLE CARRYFORWARD

As of June 30, 2016, the Company had consolidated income tax net operating loss ("NOL") carryforward for federal income tax purposes of approximately $1,782,000. The NOL will expire in various years ending through the year 2035. The utilization of certain of the loss carryforwards are limited under Section 382 of the Internal Revenue Code. The income tax expense for the year ended June 30, 2016 was $80,601. For the year ended June 30, 2015 there was an income tax benefit of $121,216.

The components of the provision for income taxes (benefits) are attributable to continuing operations as follows:

	2016		2015
Current	$	—	$	—
Federal		—		—
State
		—		—
Deferred
Federal	$	68,820	$	(103,499	)
State		11,781		(17,717	)
	$	80,601	$	(121,216	)

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

	Current		Non-Current
Deferred tax assets:
NOL and contribution carryforwards	$	115,654	$	554,982
PTO accounts		11,872		—
Allowance for doubtful accounts		1,003		—
		128,529		554,982
Deferred tax (liabilities):
Excess of tax over book depreciation		—		(3,165	)
		—		—
Net deferred tax asset (liability)	$	128,529	$	551,817

The change in the valuation allowance is as follow:  

June 30, 2015	$	—
June 30, 2016		—
Decrease in valuation allowance	$	—

Management believes it is more likely than not that it will realize the benefit of the NOL carryforward, because of its continuing trend of earnings. Therefore, a valuation allowance is not considered necessary.

Income taxes for the years ended June 30, 2016 and 2015 differ from the amounts computed by applying the effective income tax rates of 37.63%, to income before income taxes as a result of the following:

	2016		2015
Expected provision at US statutory rate	$	66,405	$	(115,425	)
State income tax net of federal benefit		7,090		(12,323	)
Nondeductibles		7,106		5,133
Change in estimates in available NOL carryforwards		—		1,399
Income tax (benefit) expense	$	80,601	$	(121,216	)

The earliest tax year still subject to examination by taxing jurisdictions is fiscal year June 30, 2013.