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8. INCOME TAXES	9 Months Ended
Sep. 30, 2014
Notes to Financial Statements
NOTE 8 - INCOME TAXES	Deferred taxes arise because of different tax treatment between financial statement accounting and tax accounting, known as “temporary differences.” The Company records the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which the Company has received a tax deduction and has not yet been recorded in the consolidated statement of operations). Management reviews and adjusts those estimates annually based upon the most current information available. However, because the recoverability of deferred taxes is directly dependent upon the future operating results of the Company, actual recoverability of deferred taxes may differ materially from management’s estimates. The provision for income taxes is based on earnings before income taxes reported for financial statement purposes and consisted of the following: as of September 30, 2014, current income tax expense was $106,425 and deferred tax expense was $196,781. Of the $196,781 recorded as deferred tax expense approximately $150,000 was due to the stock options associated with stock compensation valued under the Black Scholes model that were reduced as of September 30, 2014.

8. INCOME TAXES

9 Months Ended

Sep. 30, 2014

Deferred taxes arise because of different tax treatment between financial statement accounting and tax accounting, known as “temporary differences.” The Company records the tax effect of these temporary differences as “deferred tax assets” (generally items that can be used as a tax deduction or credit in future periods) and “deferred tax liabilities” (generally items for which the Company has received a tax deduction and has not yet been recorded in the consolidated statement of operations).

Management reviews and adjusts those estimates annually based upon the most current information available. However, because the recoverability of deferred taxes is directly dependent upon the future operating results of the Company, actual recoverability of deferred taxes may differ materially from management’s estimates.

The provision for income taxes is based on earnings before income taxes reported for financial statement purposes and consisted of the following: as of September 30, 2014, current income tax expense was $106,425 and deferred tax expense was $196,781. Of the $196,781 recorded as deferred tax expense approximately $150,000 was due to the stock options associated with stock compensation valued under the Black Scholes model that were reduced as of September 30, 2014.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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