Income Tax Expense (Benefit)

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

5. Income Tax Expense (Benefit)

The Company recognized an income tax expense (benefit) of $(48,500) for the first quarter of 2014 compared to an income tax provision of $61,869 for the same period in 2013.

Income tax expense (benefit) for the first quarter of 2014 was calculated as follows:

	Federal		State		Total
Current tax (benefit)	$	(450,000)	$	(75,000)	$	(525,000)
Deferred tax expense		377,400		99,100		476,500
	$	(72,600)	$	24,100	$	(48,500)

Income tax expense (benefit) for the first quarter of 2013 was calculated as follows:

	Federal		State		Total
Current tax expense	$	4,769	$	1,000	$	5,769
Deferred tax expense		43,700		12,400		56,100
	$	48,469	$	13,400	$	61,869

Deferred income taxes are recognized using the asset and liability method by applying income tax rates to cumulative temporary differences based on when and how they are expected to affect the tax returns. Deferred tax assets and liabilities are adjusted for income tax rate changes. Deferred income tax assets have been offset by a valuation allowance of $1,719,000 as of March 31, 2014. Management reviews deferred income taxes regularly throughout the year, and accordingly makes any necessary adjustments to properly reflect the valuation allowance based upon current financial trends and projected results.