The components of income before income taxes as shown in the accompanying Consolidated Statement of Operations, consisted of the following for the years ended December 31, 2022, 2021 and 2020:


	Years Ended December 31,
	2022			2021			2020
	(Amounts in thousands)
Income before income taxes:
Domestic	$	13,892		$	17,117		$	11,476
Foreign		(1,401	)		(231	)		1,157

Income before income taxes	$	12,491		$	16,886		$	12,633

The Company has foreign subsidiaries which generate revenues from foreign clients. Additionally, the Company has foreign subsidiaries which provide services to its U.S. operations. Accordingly, the Company allocates a portion of its income to these subsidiaries based on a “transfer pricing” model and reports such income as foreign in the above table.

The provision for income taxes, as shown in the accompanying Consolidated Statement of Operations, consisted of the following for the years ended December 31, 2022, 2021 and 2020:


	Years Ended December 31,
	2022			2021			2020
	(Amounts in thousands)
Current provision:
Federal	$	2,293		$	2,657		$	3,044
State		653			713			752
Foreign		178			234			797

Total current provision		3,124			3,604			4,593

Deferred provision (benefit):
Federal		678			873			(1,340	)
State		162			233			(327	)
Foreign		(433	)		(177	)		(326	)

Total deferred provision (benefit)		407			929			(1,993	)

Change in valuation allowance		248			132			172

Total provision for income taxes	$	3,779		$	4,665		$	2,772

The reconciliation of income taxes computed using our statutory U.S. income tax rate and the provision for income taxes for the years ended December 31, 2022, 2021 and 2020 were as follows:


	Years Ended December 31,
(Amounts in thousands)	2022				2021					2020
Income taxes computed at the federal statutory rate	$	2,623	21.0	%	$	3,546		21.0	%	$	2,653		21.0	%
State income taxes, net of federal tax benefit		804	6.4			962		5.7			602		4.7
Excess tax benefits from stock options/restricted shares		56	0.5			(82	)	(0.5	)		(920	)	(7.3	)
Charge for global intangible low-taxed income (“GILTI”)		—	—			—		—			(20	)	(0.2	)
Difference in tax rate on foreign earnings/other		48	0.4			107		0.6			285		2.3
Change in valuation allowance		248	2.0			132		0.8			172		1.4

	$	3,779	30.3	%	$	4,665		27.6	%	$	2,772		21.9	%

The components of the deferred tax assets and liabilities were as follows:


	At December 31,
	2022			2021
	(Amounts in thousands)
Deferred tax assets:
Allowance for doubtful accounts	$	126		$	112
Accrued vacation and bonuses		342			419
Stock-based compensation expense		1,692			1,274
COVID-19 payroll tax deferment		—			628
Acquisition-related transaction costs		509			540
Net operating losses		559			311

Total deferred tax assets		3,228			3,284

Deferred tax liabilities:
Prepaid expenses		441			233
Depreciation, intangibles and contingent consideration		3,148			3,005

Total deferred tax liabilities		3,589			3,238
Valuation allowance		(559	)		(311	)

Net deferred tax asset (liability)	$	(920	)	$	(265	)

A reconciliation of the beginning and ending amounts of unrecognized tax benefits related to uncertain tax positions, including interest and penalties, for the three years ended December 31, 2022 is as follows:


	Years Ended December 31,
(Amounts in thousands)	2022		2021		2020
Unrecognized tax benefits, beginning balance	$	—	$	—	$	20
Additions related to current period		—		—		—
Additions related to prior periods		—		—		—
Reductions related to prior periods		—		—		(20	)

Unrecognized tax benefits, ending balance	$	—	$	—	$	—

We evaluate deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted. GAAP accounting guidance requires us to assess whether valuation allowances should be established against deferred tax assets based on all available evidence, both positive and negative using a “more likely than not” standard. Our assessment considers, among other things, the nature of cumulative losses; forecast of future profitability; the duration of statutory carry-forward periods and tax planning alternatives. At December 31, 2022, our valuation allowance was comprised of balances within locations of Singapore, Ireland and the United Kingdom. At December 31, 2021, our valuation allowance was comprised of balances within locations of Singapore and the United Kingdom. The valuation allowance balances at these locations totaled $

559

,000, $

311

,000 and $179,000 as of December 31, 2022, 2021 and 2020, respectively, and reflect net operating losses which may not be realizable in the future.

The IRS’s audit of the Company’s 2018 tax return was completed in the third quarter of 2021 with no adjustments to our original filing. The Company’s Canadian subsidiary for years 2018 and 2019 are currently under audit.