Note D - Income Taxes and Available Carryforward

6 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE D - INCOME TAXES AND AVAILABLE CARRYFORWARD

As of December 31, 2021, the Company had consolidated income tax net operating loss ("NOL") carryforwards for federal income tax purposes of approximately $588,000. NOL arising before December 31, 2020 will expire in various years ending through the year 2035 and for losses arising in taxable years beginning after December 31, 2020, the deduction is limited to 80% of taxable income and can be carried forward indefinitely. The utilization of certain loss carryforwards are limited under Section 382 of the Internal Revenue Code.

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

	Six Months 12/31/2021			Six Months 12/31/2020
Current
Federal	$	0		$	0
State		0			0
	$	0		$	0
Deferred
Federal	$	(31,587	)	$	(22,605	)
State		(6,535	)		(4,676	)
	$	(38,122	)	$	(27,281	)
Total Income Tax Benefit / (Expense)	$	(38,122	)	$	(27,281	)

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:

	Non-Current
Deferred tax assets
NOL and contribution carryforwards	$	149,147
Share based payments		4,988
Lease liabilities - operating leases		185,468
Accrued compensated absences		5,807
Accrued bonus		4,158
Allowance for doubtful accounts		2,384
Total deferred tax assets		351,952
Deferred tax (liabilities)
Right-of-use-assets - operating leases		(201,460	)
Excess of tax over book depreciation		(36,224	)
Total deferred tax (liabilities)		(237,684	)
Total deferred tax asset		114,268
Valuation Allowance		(31,960	)
Net Deferred Tax Asset	$	82,308
The change in the valuation allowance is as follows:
June 30, 2021	$	-
December 31, 2021	$	(31,960	)
	$	(31,960	)

Income taxes for the six months ended December 31, 2021 and 2020 differ from the amounts computed by applying the effective income tax rate of 25.35%, to income before income taxes as a result of the following:

	Six Months Decemember 31, 2021			Six Months December 31, 2020
Expected (provision) at US statutory rate	$	(2,739	)	$	(67,345	)
State income tax net of federal (provision)		(567	)		(13,934	)
Nondeductible Expense		(1,854	)		(2,303	)
Change in estimates of loss carryforward		(1,002	)		(337	)
Change in valuation allowance		(31,960	)	$	56,638
Income Tax (Expense)	$	(38,122	)	$	(27,281	)

The earliest tax year still subject to examination by a major taxing jurisdiction is fiscal year end June 30, 2019.

The Company performed a review of its uncertain tax positions in accordance with Accounting Standards Codification ASC 740- 10 "Uncertainty in Income Taxes". In this regard, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of this review, the Company concluded that at this time there are no uncertain tax positions, and there has been no cumulative effect on retained earnings.