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INCOME TAXES
 12 Months Ended
Sep. 29, 2012
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 6. INCOME TAXES

 

The components of our provision for income taxes for our fiscal years 2012 and 2011 are as follows:

 

   2012   2011 
Current:          
    Federal  $660,000   $502,000 
    State   175,000    138,000 
   835,000    640,000 
Deferred:          
    Federal   (63,000)   (36,000)
    State   (7,000)   (6,000)
    (70,000)   (42,000)
   $765,000   $598,000 

 

A reconciliation of income tax computed at the statutory federal rate to income tax expense is as follows:

 

   2012   2011 
         
Tax provision at the statutory rate of 34%  $741,000   $617,000 
State income taxes, net of federal income tax   94,000    85,000 
FICA tip credit   (227,000)   (200,000)
Tax effect of consolidation elimination entry   —    76,000 
True up adjustment    110,000    — 
Other permanent items   47,000    20,000 
   $765,000   $598,000 

 

We have deferred tax assets which arise primarily due to depreciation recorded at different rates for tax and book purposes offset by cost basis differences in depreciable assets due to the deferral of the recognition of insurance recoveries on casualty losses for tax purposes, investments in and management fees paid by limited partnerships, accruals for potential uninsured claims, bonuses accrued for book purposes but not paid within two and a half months for tax purposes, the capitalization of certain inventory costs for tax purposes not recognized for financial reporting purposes, the recognition of revenue from gift cards not redeemed within twelve months of issuance, allowances for uncollectable receivables, unfunded limited retirement commitments and tax credit carryforwards generated as a result of the application of alternative minimum taxes.

 

The components of our deferred tax assets at September 29, 2012 and October 1, 2011 were as follows:

 

   2012   2011 
         
Current:          
  Reversal of aged payables  $27,000   $27,000 
  Capitalized inventory costs   25,000    22,000 
  Accrued bonuses   188,000    164,000 
  Accruals for potential uninsured claims   30,000    19,000 
  Gift cards   72,000    48,000 
  Limited partnership management fees   29,000    74,000 
   $371,000   $354,000 
Long-Term:          
  Book/tax differences in property and equipment  $540,000   $459,000 
  Limited partnership investments   386,000    418,000 
  Accrued limited retirement   35,000    31,000 
   $961,000   $908,000