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Income Tax
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Tax

NOTE 12 - Income Tax

 

The components of income taxes benefit are as follows:

 

   December 31, 2024   December 31, 2023 
Federal rate   21.00%   21.00%
Blended state tax rate   4.12%   4.11%
Effective tax rate   25.12%   25.11%

 

Effective Tax Rate Reconciliation for the Year Ended December 31, 2024
          %     $  
Pretax Book Income     959,561       21.00 %     201,508  
Permanent Differences     84,240       1.84 %     17,690  
PY Federal Perm True-up     117,653       2.57 %     24,707  
State income tax     68,981       6.79 %     65,198  
Other Deferred adjustment     -       -0.73 %     (6,989 )
Total Tax  Expenses             31.47 %     302,114

 

 

HOUR LOOP, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

December 31, 2024 and 2023

 

Effective Tax Rate Reconciliation for the Year Ended December 31, 2023
          %     $  
Pretax Book Income     (3,160,454 )     21.00 %     (663,695 )
Permanent Differences     78,048       -0.52 %     16,390  
PY Federal Perm True-up     73,914       -0.49 %     15,522  
State income tax     24,136       3.12 %     (98,586 )
Other Deferred adjustment     -       0.01 %     (391 )
Total Tax benefits             23.12 %     (730,760 )

 

   Current   Deferred   Total 
   Income Tax   Income Tax   Income Tax 
Tax Expense Summary, for the Year Ended December 31, 2024  Expense   Expense   Expense 
Federal   39,989    193,145    233,134 
State   18,013    50,967    68,980 
Total Tax Expense   58,002    244,112    302,114 

 

   Current   Deferred   Total 
   Income Tax   Income Tax   Income Tax 
Tax Expense Summary, for the Year Ended December 31, 2023  Benefit   Benefit   Benefit 
Federal  $(637,242)  $-   $(637,242)
State   (117,654)   24,136    (93,518)
Total tax expense (benefit)  $(754,896)  $24,136   $(730,760)

 

 

HOUR LOOP, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

December 31, 2024 and 2023

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at December 31, 2024 and 2023 were as follows:

 

   Deferred Tax Assets   Deferred Tax Assets 
Deferred Tax Assets summary  December 31, 2024   December 31, 2023 
Federal  $908,691   $1,101,836 
State   151,413    202,379 
Total  $1,060,104   $1,304,215 

 

   Deferred Tax Assets   Deferred Tax Assets 
Deferred Tax Assets summary  December 31, 2024   December 31, 2023 
Operating lease right of use lease assets  $787   $172
Inventories allowance   140,743    169,725 
Net loss carry forward   918,574    1,134,318 
Total  $1,060,104   $1,304,215 

 

The Company files income tax return in the U.S. federal jurisdiction and various state jurisdictions. Based on management’s evaluation, there is no provision necessary for material uncertain tax position for the Company at December 31, 2024 and 2023.

 

For the years ended December 31, 2024 and 2023, the Company reported net operating income (loss) of $657,447 and $(2,429,694), respectively. The net operating loss carryforward is not subject to any expiration period under federal regulations, while at the state level, the expiration period usually ranges up to 20 years, or there may be no expiration period at all.

 

The Company expects to generate sufficient taxable income in future periods against which the deferred tax assets can be utilized. Accordingly, a valuation allowance may not be needed.

 

 

HOUR LOOP, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

December 31, 2024 and 2023