Annual report pursuant to Section 13 and 15(d)

FEDERAL AND STATE INCOME TAXES

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FEDERAL AND STATE INCOME TAXES
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
FEDERAL AND STATE INCOME TAXES

NOTE 7 — FEDERAL AND STATE INCOME TAXES

 

Income tax expense consisted of the following:

 

    Year Ended
December 31,
2020
  Year Ended
December 31,
2019
 
State income tax:          
Current, net of refund   $ 17,800   $ 22,514  
Federal income tax:              
Deferred     62,967     (186,775 )
Current     (62,967 )   296,330  
Income tax expense   $ 17,800   $ 132,069  

 

The reconciliation of income taxes shown in the financial statements and amounts computed by applying the Federal expected tax rate of 21% for year 2020 and 2019 is as follows:

 

    Year Ended
December 31,
2020
  Year Ended
December 31,
2019
 
           
(Loss)/income before taxes   $ (1,194,263 ) $ 696,418  
Income taxes computed at the federal statutory rate   $ (250,795 ) $ 146,248  
State income and franchise tax     17,800     22,514  
Permanent differences and other     250,795     (36,693 )
Income tax expense   $ 17,800   $ 132,069  

 

The significant components of deferred income tax assets, net are as follows:

 

    December 31,
2020
  December 31,
2019
 
           
Deferred compensation cost   $ 239,036   $ 259,068  
Depreciation and amortization     (135,092 )   (71,331 )
Allowance for bad debts and other     21,330     504  
Deferred income tax assets, net   $ 125,274   $ 188,241  

 

Our U.S. federal and state income tax returns remain open to examination for the tax years 2017 through 2020.