INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

9 - INCOME TAXES

Income tax provision is summarized as follows:

	Year Ended December 31,
	2023			2022
Current:
Federal	$	339,000		$	563,000
State		62,000			96,000
		401,000			659,000
Deferred:
Federal		12,000			(89,000	)
State		(1,000	)		(37,000	)
Decrease in valuation allowance		-			(1,915,000	)
		11,000			(2,041,000	)
Income tax (benefit) provision	$	412,000		$	(1,382,000	)

The actual income tax provision differs from the “expected” tax computed by applying the Federal corporate tax rate of 21% to the income before income taxes as follows:

	Year Ended December 31,
	2023			2022
“Expected” income tax benefit	$	474,000		$	389,000
State tax expense, net of Federal benefit		49,000			99,000
Decrease in valuation allowance		-			(1,915,000	)
Other		(111,000	)		45,000
Income tax provision	$	412,000		$	(1,382,000	)

The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows:

	December 31,
	2023			2022
Deferred tax assets:
Inventory reserves	$	1,534,000		$	1,513,000
Allowances for bad debts and returns		2,000			2,000
Accrued expenses		26,000			23,000
Asset valuation reserve		539,000			539,000
Other		79,000			107,000
Total deferred tax assets		2,180,000			2,184,000
Valuation allowance		-			-
		2,180,000			2,184,000
Deferred tax liabilities:
Deferred state taxes		(137,000	)		(137,000	)
Total deferred tax liabilities		(137,000	)		(137,000	)
Net deferred tax assets	$	2,043,000		$	2,047,000

As of December 31, 2023, we have $0 in net operating loss carryforwards for federal and state income tax purposes. In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. We consider the scheduled reversal of deferred tax assets, the level of historical taxable income and tax planning strategies in making the assessment of the realizability of deferred tax assets. We have identified the U.S. federal and California as our "major" tax jurisdiction. With limited exceptions, we remain subject to IRS examination of our income tax returns filed within the last three (3) years, and to California Franchise Tax Board examination of our income tax returns filed within the last four (4) years.