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Note 12 - Income Tax
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 12 – Income Tax

 

The provision for income taxes is comprised of the following (in thousands):

 

  

December 31,

  

December 31,

 
  

2023

  

2022

 

Current taxes

        

Federal

 $1,080  $1,874 

State

  614   434 

Total current taxes

  1,694   2,308 

Deferred taxes

        

Federal

  (332)  (279)

State

  (17)  (134)

Total deferred taxes

  (349)  (413)

Provision for income taxes

 $1,345  $1,895 

 

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 (in thousands):

 

  

December 31,

  

December 31,

 
  

2023

  

2022

 

Deferred tax assets

        

Workers' compensation claims liability

  1,578  $1,227 

Bad debt reserve

  49   17 

Accrued vacation

  80   73 

Impairment of notes receivable

  153   63 

Stock based compensation

  92   268 

Net operating loss carryforward

  92   123 

Other

  40   87 

Total deferred tax asset

  2,084   1,858 

Deferred tax liabilities

        

Depreciation and amortization

  (1,702)  (1,918)

Deferred gain on installment sale

  (57)  - 

Total deferred tax liabilities

  (1,759)  (1,918)

Total deferred taxes, net

 $325  $(60)

 

At December 31, 2023, the Company has a federal net operating loss carry-forward of approximately $209 thousand available to offset future federal taxable income. The federal net operating loss may be carried forward indefinitely, however, utilization of future net operating losses may be limited due to ownership changes under applicable sections of the Internal Revenue Code.

 

Management estimates that our effective tax rates were approximately 17.3% and 13.7% for 2023 and 2022, respectively. 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 (in thousands except percentages):

 

  

December 31, 2023

  

December 31, 2022

 

Income tax expense based on statutory rate

 $1,634   21.0% $2,913   21.0%

Non-deductible executive compensation

  142   1.8%  120   0.9%

Stock based compensation

  (77)  (1.0)%  (75)  (0.5)%

State income taxes expense net of federal taxes

  468   6.0%  210   1.5%

WOTC

  (925)  (11.9)%  (1,269)  (9.1)%

Other

  103   1.3%  (4)  (0.0)%

Total taxes on income

 $1,345   17.3% $1,895   13.7%

 

U.S. federal income tax returns after 2020 remain open to examination. Generally, state income tax returns after 2019 remain open to examination. No income tax returns are currently under examination. As of December 31, 2023, and December 31, 2022, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes.