INCOME TAXES

Income tax expense (benefit) is comprised of the following:



	December 31,
	2013			2012
Federal:
Current	$	432,000		$	329,000
Deferred	(88,000		)	(190,000		)
	344,000			139,000
State:
Current	60,000			87,000
Deferred	(13,000		)	(44,000		)
	47,000			43,000

	$	391,000		$	182,000

The provision for income taxes differs from the amount determined by applying the federal statutory tax rate to pre-tax income as a result of the following:



	December 31,
	2013					2012
Income taxes at statutory rate	$	368,000		34.0	%	$	190,000		34.0	%
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit	49,000			4.5	%	25,000			4.5	%
Other	(26,000		)	(2.4	)%	(33,000		)	(5.9	)%

	$	391,000		36.1	%	$	182,000		32.6	%

Prepaid income taxes relate to amounts refundable from federal and state tax authorities for overpayment of estimated taxes that are expected to be applied towards future required payments.

Deferred tax assets (liabilities) are as follows:



	December 31,
	2013			2012
Depreciation	$	(630,000	)	$	(694,000	)
Unrealized losses on investments available for sale	27,000			—
Provision for doubtful accounts	111,000			90,000
Vacation accrued	86,000			81,000
Deferred income	170,000			186,000
Other	81,000			81,000

Net deferred tax asset (liability)	(155,000		)	(256,000		)

Current portion, net	475,000			438,000
Long-term portion, net	(630,000		)	(694,000		)

	$	(155,000	)	$	(256,000	)