8. Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

8. Income Taxes

Significant components of the provision for taxes based on income are as follows for the years ended December 31:

	2013			2012
US Federal	$	(4,139	)	$	–
US State		1,050			1,600
Foreign		12,150			10,522
Total current taxes		9,061			12,122
Deferred taxes		(80,636	)		13,229
Total provision (benefit) for income taxes	$	(71,575	)	$	25,351

Significant temporary differences that give rise to the deferred tax assets as of December 31, 2013 and 2012 follow:

	2013		2012
Deferred tax assets/(liabilities):
Net operating loss carryforwards	$	257,870	$	184,279
Allowance for doubtful accounts		6,445		–
Furniture and equipment		–		(600	)
Net deferred tax assets	$	264,315	$	183,679

The Company has federal net operating loss carryforwards totaling $619,863 and $807,580 in state carryforwards. These net operating losses expire from 2021 through 2031. The Company has not recorded any valuation allowance against these deferred tax assets.

Tax years that remain open by the Internal Revenue Service and the California Franchise Tax Board are 2010 through 2013. Additionally, NOLs from earlier years may be examined when they are utilized.

Tax rate reconciliation
	2013		2012
Federal tax rate		34.0%		34.0%
State taxes, net of benefit		5.8		5.8
Non-deductible tax expenses		81.6		2.1
Rate difference		(29.0)		(14.7)
NOL true-up adjustment		(616.5)		–
Other		(23.1)		(5.1)
Effective tax rate		(547.2)%		22.1%