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3 - Income Taxes
 12 Months Ended
Dec. 31, 2022
Notes  
3 - Income Taxes

 

3 - Income Taxes—The provision for income tax expense consists of the following:

 

2022

2021

Current:

 

 

Federal

$   723,000

$    378,000

State

40,000

8,000

Deferred

22,000

(85,000)

$   785,000

$    301,000

 

The following is a reconciliation of the statutory federal income tax rate to the actual effective tax rate:

 

 

2022

 

2021

 

Amount

 

%

 

Amount

 

%

Expected tax at U.S. statutory rate

$     767,000

 

21.0

 

$     297,000

 

21.0

Permanent differences

(14,000)

 

(0.4)

 

(2,000)

 

(0.1)

State taxes, net of federal benefit

32,000

 

0.9

 

6,000

 

0.4

Income tax expense

$   785,000

 

21.5

 

$    301,000

 

21.3

 

 

 

The deferred tax assets (liabilities) consist of the following:

 

2022

 

2021

 

 

 

 

Depreciation and amortization

$ (1,216,451)  

 

$ (1,196,119)  

Inventory

157,687   

 

157,600   

Accrued vacation

71,923   

 

74,037   

Allowance for doubtful accounts

38,250   

 

38,250   

Other, net

507   

 

148   

$ (948,084)  

 

$ (926,084)  

 

 

Valuation allowances related to deferred taxes are recorded based on the “more likely than not” realization criteria.  The Company reviews the need for a valuation allowance on a quarterly basis for each of its tax jurisdictions.  A deferred tax valuation allowance was not required at December 31, 2022 or 2021.