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INCOME TAXES | 12 Months Ended
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Mar. 31, 2016
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | NOTE 9 - INCOME TAXES The Company files separate tax returns in the United States and in Macau, China. The Macau Subsidiary has received approval from the Macau government to operate its business as a Macau Offshore Company (MOC), and is exempt from the Macau income tax. For the fiscal years ended March 31, 2016, 2015 and 2014, the Macau Subsidiary recorded no tax provision. The net operating loss carryforward is subject to an IRC Section 382 limitation. As of March 31, 2016, 2015 and 2014, The Singing Machine had net deferred tax assets before valuation allowances of approximately $2.4 million, $3.0 million, and $3.2 million, respectively, against which the Company recorded valuation allowances totaling approximately $0, $0.7 million, and $0.8 million, respectively. The income tax provision (benefit) for federal, foreign, and state income taxes in the consolidated statements of income consisted of the following components for 2016, 2015 and 2014:
|  | 2016 |  | 2015 |  | 2014 |
Income tax provision: |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | - |  | $ | - |  | $ | - |
State |  |  | - |  |  | - |  |  | - |
Total current Federal and State |  | $ | - |  | $ | - |  | $ | - |
Deferred: |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (89,718) |  | $ | 80,836 |  | $ | (675,447) |
State |  |  | (11,658) |  |  | 11,865 |  |  | (103,350) |
Total income tax (benefit) provision |  | $ | (101,376) |  | $ | 92,701 |  | $ | (778,797) |
The United States and foreign components of income (loss) before income taxes are as follows:
|  | 2016 |  | 2015 |  | 2014 |
United States |  | $ | 1,406,301 |  | $ | 161,255 |  | $ | (62,095) |
Foreign |  |  | 195,713 |  |  | 101,604 |  |  | 287,614 |
|  | $ | 1,602,014 |  | $ | 262,859 |  | $ | 225,519 |
The actual tax (benefit) provision differs from the "expected" tax expense for the years ended March 31, 2016, 2015 and 2014 (computed by applying the U.S. Federal Corporate tax rate of 34 percent to income before taxes) as follows:
|  | 2016 |  | 2015 |  | 2014 |
Expected tax expense |  | $ | 544,684 |  | $ | 89,372 |  | $ | 76,676 |
State income taxes, net of Federal income tax benefit |  |  | 19,420 |  |  | (97) |  |  | 7,815 |
Permanent differences |  |  | 11,176 |  |  | 7,507 |  |  | 8,374 |
Deemed Dividend |  |  | 80,207 |  |  | 37,563 |  |  | 108,864 |
Change in valuation allowance |  |  | (708,385) |  |  | (91,034) |  |  | (820,040) |
Tax rate differential on foreign earnings |  |  | (75,007) |  |  | (39,272) |  |  | (111,164) |
Other |  |  | 26,529 |  |  | 88,662 |  |  | (49,322) |
Actual tax (benefit) provision |  | $ | (101,376) |  | $ | 92,701 |  | $ | (778,797) |
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows:
|  | 2016 |  | 2015 |  | 2014 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |
Federal net operating loss carryforward |  | $ | 1,481,531 |  | $ | 2,041,207 |  | $ | 2,076,141 |
State net operating loss carryforward |  |  | 277,673 |  |  | 318,830 |  |  | 413,401 |
AMT credit carryforward |  |  | 52,004 |  |  | 52,004 |  |  | 36,808 |
Inventory differences |  |  | 443,749 |  |  | 431,744 |  |  | 490,716 |
Allowance for doubtful accounts |  |  | 19,614 |  |  | 67,305 |  |  | 66,658 |
Reserve for sales returns |  |  | 112,100 |  |  | 76,482 |  |  | 90,895 |
Stock option compensation expense |  |  | 80,489 |  |  | 74,716 |  |  | 59,713 |
Stock warrants |  |  | 38,863 |  |  | 39,194 |  |  | 39,193 |
Accrued Vacation |  |  | 11,212 |  |  | 9,183 |  |  | 10,241 |
Total deferred tax assets |  |  | 2,517,235 |  |  | 3,110,665 |  |  | 3,283,766 |
Deferred tax liability: |  |  |  |  |  |  |  |  |  |
Depreciation |  |  | (108,704) |  |  | (96,725) |  |  | (86,091) |
Net deferred tax assets before valuation allowance |  |  | 2,408,531 |  |  | 3,013,940 |  |  | 3,197,675 |
Valuation allowance |  |  | - |  |  | (708,385) |  |  | (799,419) |
Net deferred tax assets |  | $ | 2,408,531 |  | $ | 2,305,555 |  | $ | 2,398,256 |
During the fiscal years ended March 31, 2016, March 31, 2015 and March 31, 2014, the Company released portions of the valuation allowance. The release of the valuation allowance was determined in accordance with the provisions of ASC 740, which require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. The analysis performed to assess the realizability of the deferred tax assets included an evaluation of the pattern and timing of the reversals of temporary differences and the length of carryback and carryforward periods available under the applicable federal and state laws; and the amount and timing of future taxable income. As of March 31, 2016 the analysis indicated that it is more likely than not that the deferred tax asset recorded will be realized. As a result, approximately $0.7 million, $0.0 million and $0.8 million of the valuation allowance were released during the fiscal years ended March 31, 2016, 2015 and 2014, respectively and there is no remaining valuation remaining as of March 31, 2016. At March 31, 2016, the Company has federal tax net operating loss carryforwards in the amount of approximately $4.4 million that begin to expire in the year 2029. In addition, the Company has state tax net operating loss carryforwards in the amount of approximately $6.4 million that will begin to expire beginning in 2025. The Company is no longer subject to income tax examinations for fiscal years before 2013.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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