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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before provision for income taxes are as follows (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| December 31, 2022 (52 weeks) |  | January 1, 2022 (52 weeks) |  | January 2, 2021 (53 weeks)
Income before provision for income taxes: |  |  |  |  |
U.S. | $ | 45,387 |  |  | $ | 43,511 |  |  | $ | 26,054 |
Foreign | 13,413 |  |  | 10,764 |  |  | 7,568 |
Total | $ | 58,800 |  |  | $ | 54,275 |  |  | $ | 33,622 |
The provision (benefit) for income taxes consists of the following (in thousands):
| Year Ended |  | Year Ended |  | Year Ended
| December 31, 2022 (52 weeks) |  | January 1, 2022 (52 weeks) |  | January 2, 2021 (53 weeks)
Currently payable: |  |  |  |  |
Federal | $ | 8,805 |  |  | $ | 7,072 |  |  | $ | 4,039 |
Foreign | 2,956 |  |  | 2,517 |  |  | 1,335 |
State | 3,231 |  |  | 2,561 |  |  | 2,627 |
Total current expense | 14,992 |  |  | 12,150 |  |  | 8,001 |
Deferred: |  |  |  |  |
Federal | (21) |  |  | (92) |  |  | 1,170 |
Foreign | 114 |  |  | 230 |  |  | 309 |
State | 96 |  |  | 308 |  |  | (365) |
Total deferred expense | 189 |  |  | 446 |  |  | 1,114 |
Total tax expense | $ | 15,181 |  |  | $ | 12,596 |  |  | $ | 9,115 |
A reconciliation of CRA's tax rates with the federal statutory rate is as follows:
| Fiscal Year |  | Fiscal Year |  | Fiscal Year
| 2022 |  | 2021 |  | 2020
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal income tax benefit | 5.2 |  |  | 5.3 |  |  | 5.8 |
Share-based compensation | (2.4) |  |  | (5.0) |  |  | (1.8) |
Meals & Entertainment Expense | 0.3 |  |  | 0.1 |  |  | 0.2 |
Executive Compensation | 1.6 |  |  | 1.3 |  |  | 1.6 |
Other | 0.1 |  |  | 0.5 |  |  | 0.3 |
Annual effective tax rate | 25.8 | % |  | 23.2 | % |  | 27.1 | %
The components of CRA's deferred tax assets (liabilities) are as follows (in thousands):
| December 31, 2022 |  | January 1, 2022
Deferred tax assets: |  |  |
Accrued compensation and related expense | $ | 15,432 |  |  | $ | 15,047 |
Allowance for doubtful accounts | 1,263 |  |  | 1,375 |
Net operating loss carryforwards | 560 |  |  | 281 |
Lease liabilities | 31,552 |  |  | 34,523 |
Foreign exchange and other | 73 |  |  | 76 |
Total gross deferred tax assets | 48,880 |  |  | 51,302 |
Less: valuation allowance | (749) |  |  | (308) |
Total deferred tax assets, net of valuation allowance | 48,131 |  |  | 50,994 |
Deferred tax liabilities: |  |  |
Goodwill and other intangible asset amortization | 4,749 |  |  | 4,262 |
Right-of-Use assets | 25,376 |  |  | 27,710 |
Property and equipment | 8,397 |  |  | 9,788 |
Prepaids and other | 1,399 |  |  | 944 |
Total deferred tax liabilities | 39,921 |  |  | 42,704 |
Net deferred tax assets | $ | 8,210 |  |  | $ | 8,290 |
At December 31, 2022, CRA had U.S. local and foreign net operating losses of $2.4 million with lives ranging from 20 years to indefinite. The aggregate changes in the balances of gross unrecognized tax benefits were as follows (in thousands):
| Fiscal Year |  | Fiscal Year
| 2022 |  | 2021
Balance at beginning of period | $ | 41 |  |  | $ | 203 |
Reductions as a result of a lapse of the applicable statutes of limitations | (6) |  |  | (162) |
Balance at end of the period | $ | 35 |  |  | $ | 41 |
CRA files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. A number of years may elapse before an uncertain tax position, for which CRA has unrecognized tax benefits, is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, CRA believes that its unrecognized tax benefits reflect the most likely outcome. CRA adjusts these unrecognized tax benefits, and the associated interest, in light of changing facts and circumstances. At the end of fiscal 2022, accrued interest for uncertain tax positions and total unrecognized tax benefit were immaterial. The number of years with open tax audits varies depending on the tax jurisdiction. CRA's major taxing jurisdiction is the United States where CRA is no longer subject to U.S. federal examinations by the Internal Revenue Service for years before fiscal 2019. Within the significant states where CRA is subject to income tax, CRA is no longer subject to examinations by state taxing authorities before fiscal 2018. CRA's United Kingdom ("U.K.") subsidiary's corporate tax returns are no longer subject to examination by Her Majesty's Revenue and Customs for years before fiscal 2021. During fiscal 2022, an examination by the German Tax Authority for fiscal years 2014-2016 concluded with no material adjustment. CRA believes its reserves for uncertain tax positions are adequate. During the fourth quarter of fiscal 2020, CRA considered the operating needs of the U.K. subsidiary, as well as the tax implications of no longer asserting indefinite reinvestment with respect to the U.K. operations. As a result of both a qualitative and quantitative analysis, previously taxed and untaxed post fiscal 2018 U.K. earnings were no longer considered permanently reinvested. Deferred taxes that are a consequence of foreign exchange translation resulting from earnings that are no longer considered permanently reinvested are recorded as a component of foreign currency translation adjustments on the consolidated statements of comprehensive income. In fiscal 2022, CRA's U.S. parent entity received approximately $6.0 million in cash dividends from CRA's U.K. subsidiary. These dividends were distributed out of primarily untaxed earnings and therefore qualified for a full dividends-received-deduction. As a result, foreign exchange on the transaction was negligible. Deferred income taxes or foreign withholding taxes, estimated to be $0.4 million, have not been recorded for other jurisdictions as those earnings are considered to be permanently reinvested. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income,” and a one percent excise tax on net repurchases of stock after December 31, 2022. The Company is continuing to evaluate the Inflation Reduction Act and its requirements, as well as the application to its business

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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