Annual report pursuant to Section 13 and 15(d)

7. Income Taxes (Tables)

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7. Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2012
Income Taxes Tables  
Deferred tax assets

The tax effects of significant temporary differences representing deferred tax assets at December 31, 2012 and 2011, are as follows:


 

    2012     2011  
Deferred tax assets:            
Net operating loss carryforward   $ 5,501,500     $ 5,559,500  
Accrued vacation and commissions     312,200       261,800  
Fixed assets     48,100       46,100  
Allowance for doubtful accounts     100       53,400  
AMT tax credit carryforward     6,600       9,500  
Other     9,700       8,200  
Subtotal     5,878,200       5,938,500  
Valuation allowance     (5,878,200 )     (5,938,500 )
Total   $ -     $ -

 		 

Provision for income taxes

The provision for income taxes is at an effective rate different from the federal statutory rate due principally to the following:

 

    December 31,  
    2012     2011  
                 
Income before taxes   $ 100,423     $ 156,201  
Income tax expense (benefit) on above amount at federal statutory rate     34,100       53,100  
State income tax expense (benefit), net of federal expense (benefit)     4,000       6,200  
Permanent differences     7,600       5,600  
Other     14,600       (800 )
Change in valuation allowance     (60,300 )     (61,300 )
Provision for income taxes   $ -     $ 2,800  

Current income taxes
Current income taxes   2012     2011  
                 
Federal   $ 83,900     $ 179,000  
State     9,900       21,100  
Alternative minimum tax     -       2,800  
Benefit from utilization of net operating losses     (93,800 )     (200,100 )
      -       2,800  
Deferred taxes     -       -  
    $ -     $ 2,800