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13. Income Tax | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Tax | The provision for income taxes is comprised of the following:
|  | December 31, 2020 |  |  | December 31, 2019 |
Current |  |  |  |  |  |
Federal |  | $ | 1,812,710 |  |  | $ | 3,551,418 |
State |  |  | 696,154 |  |  |  | 996,510 |
Deferred |  |  |  |  |  |  |  |
Federal |  |  | (1,246,828 | ) |  |  | (1,113,042 | )
State |  |  | (520,999 | ) |  |  | 46,110 |
Change in valuation allowance |  |  | - |  |  |  | - |
Provision for income taxes |  | $ | 741,038 |  |  | $ | 3,480,996 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred taxes are as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
Deferred Tax Assets and Liabilities |  |  |  |  |  |
Workers' compensation claims liability |  | $ | 1,131,695 |  |  | $ | 947,023 |
Depreciation/amortization |  |  | 205,987 |  |  |  | 279,990 |
Bad debt reserve |  |  | 18,984 |  |  |  | 41,436 |
Accrued vacation |  |  | 33,956 |  |  |  | 37,771 |
Cash to Accrual - 481 Adjustment |  |  | (1,888,302 | ) |  |  | (3,000,216 | )
Impairment of notes receivable |  |  | 394,674 |  |  |  | - |
Stock based compensation |  |  | 182,385 |  |  |  | 5,550 |
Total deferred tax asset |  | $ | 79,379 |  |  | $ | (1,688,446 | )
Management estimates that our effective tax rates was approximately 12.1% for 2020. The items accounting for the difference between income taxes computed at the statutory federal income tax rate and the income taxes reported on the statements of income are as follows:
|  | December 31, 2020 |  |  | December 31, 2019 |
Income tax expense based on statutory rate |  | $ | 1,281,095 |  |  |  | 21.0 | % |  | $ | 624,860 |  |  |  | 21.0 | %
Permanent differences |  |  | 4,233 |  |  |  | 0.1 | % |  |  | (789,810 | ) |  |  | (26.5 | )%
State income taxes expense net of federal taxes |  |  | 138,375 |  |  |  | 2.3 | % |  |  | 820,698 |  |  |  | 27.6 | %
WOTC |  |  | (712,891 | ) |  |  | (11.7 | )% |  |  | (498,000 | ) |  |  | (16.7 | )%
HQ Conversion to C Corp |  |  | - |  |  |  | 0.0 | % |  |  | 3,320,594 |  |  |  | 111.6 | %
Other |  |  | 30,226 |  |  |  | 0.5 | % |  |  | 2,654 |  |  |  | 0.1 | %
Total taxes on income |  | $ | 741,038 |  |  |  | 12.1 | % |  | $ | 3,480,996 |  |  |  | 117.0 | %

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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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://asc.fasb.org/extlink&oid=116825942&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 http://asc.fasb.org/extlink&oid=84230637&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 http://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 http://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 http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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