(7)	Income Taxes

The components of income (loss) before income taxes and dividends on preferred stock for the years ended December 31, 2017 and 2016 were as follows:

	2017		2016
	(in thousands)
United States	$	(5,587)	$	(7,545)
Foreign		404		529
	$	(5,183)	$	(7,016)

The components of the provision (benefit) for income taxes by taxing authority for the years ended December 31, 2017 and 2016 were as follows:

	2017		2016
	(in thousands)
Current provision:
Federal	$	-	$	-
Foreign		78		119
States		-		-
Total current provision		78		119
Deferred provision (benefit):
Federal		(3,033)		(24)
Foreign		-		-
States		-		(51)
Total deferred provision (benefit):		(3,033)		(75)
	$	(2,955)	$	44

Significant components of the Company’s deferred federal income taxes were as follows:

	December 31,			December 31,
	2017			2016
	Non-Current
Deferred tax assets:
Accrued liabilities	$	136		$	15
Deferred compensation		520			1,113
Allowance for doubtful accounts		71			101
Inventory		73			83
Net operating loss		2,783			6,528
Property and equipment		71			143
Foreign tax credit carry forward		-			3,297
Deferred tax assets		3,654			11,280
Deferred tax liabilities:
Valuation allowance		(3,654	)		(11,280	)
Equity in foreign investments		-			(2,824	)
Translation gain		-			-
Deferred tax liabilities		(3,654	)		(14,104	)
Net deferred tax assets (liabilities)		-			(2,824	)

The Company’s deferred tax assets are primarily related to net operating loss carry forwards. A valuation allowance was established at December 31, 2017 and 2016 due to uncertainty regarding future realization of deferred tax assets. Our total valuation allowance as of December 31, 2017 and 2016 is $3.65 million and $11.28 million, respectively.

The difference between the effective income tax rate reflected in the provision for income taxes and the amounts, which would be determined by applying the statutory income tax rate of 34% for both 2017 and 2016, is summarized as follows:

	2017		2016
	(in thousands)
(Provision for) benefit from U.S federal statutory rate	$	1,762	$	2,385
Effect of state income taxes		32		51
Non-deductible business meals and entertainment expenses		(45)		(11)
Foreign income taxes included in equity in earnings		496		140
Accrual to return adjustments and other		235		81
Change in valuation allowance		4,734		(2,690)
Change in enacted tax rate		(4,259)		-
Total (expense)	$	2,955	$	(44)

The Company files income tax returns in the United States Federal jurisdiction and various state jurisdictions.