| FEDERAL AND STATE INCOME TAXES |
NOTE 7 FEDERAL
AND STATE INCOME TAXES
The provision for income taxes
as of December 31, 2019, and 2018 consisted of:
| |
|
December
31,
2019 |
|
December
31,
2018 |
|
| State income tax: |
|
|
|
|
|
| Current, net of
refund |
|
$ |
22,514 |
|
$ |
12,391 |
|
| Federal income tax: |
|
|
|
|
|
|
|
| Deferred |
|
|
(186,775 |
) |
|
23,141 |
|
| Current |
|
|
296,330 |
|
|
230,848 |
|
| Total |
|
$ |
132,069 |
|
$ |
266,380 |
|
The reconciliation of income
taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 21% for year 2019 and
2018 is as follows:
| |
|
December
31,
2019 |
|
December
31,
2018 |
|
| |
|
|
|
|
|
| Income before tax |
|
$ |
696,418 |
|
$ |
1,176,950 |
|
| Computed expected tax |
|
$ |
146,248 |
|
$ |
247,160 |
|
| State income and franchise tax |
|
|
22,514 |
|
|
12,391 |
|
| Other |
|
|
(36,693 |
) |
|
6,829 |
|
| Provision for taxes |
|
$ |
132,069 |
|
$ |
266,380 |
|
The components of deferred
tax assets at December 31, 2019, and 2018, respectively, are as follows:
| |
|
December
31,
2019 |
|
December
31,
2018 |
|
| |
|
|
|
|
|
| Deferred compensation cost |
|
$ |
259,068 |
|
$ |
79,632 |
|
| Depreciation and amortization |
|
|
(71,331 |
) |
|
(79,640 |
) |
| Allowance for bad debts and other |
|
|
504 |
|
|
1,474 |
|
| Deferred tax asset |
|
$ |
188,241 |
|
$ |
1,466 |
|
|