The (benefit from) provision for income taxes consists of the following:

 

		Years ended December 31,
Current		2017				2016
Federal		$	1,738,132			$	1,058,714
State			117				(3,501	)
Total current provision for income taxes			1,738,249				1,055,213
Deferred
Federal			(31,760	)			59,712
State			---				---
Total deferred provision for income taxes			(31,760	)			59,712
Total provision for income taxes		$	1,706,489			$	1,114,925

 

 

 

		Years ended December 31,
		2017								2016
		($)				Tax rate				($)				Tax rate
Income taxes at statutory federal income tax rate of 34%		$	1,887,000				34.0	%		$	1,257,000				34.0	%
State income taxes, net of Federal benefit			---				---				(2,000	)			---
Domestic Production Activities tax benefit			(160,000	)			(2.9	)			(104,000	)			(2.8	)
Nondeductible expenses			1,000				---				1,000				---
Research & development credits			(34,000	)			(0.6	)			(30,000	)			(0.8	)
Non-taxable dividends			(5,000	)			(0.09	)			---				---
Deferred tax asset reduction for federal tax rate change			21,000				0.4				---				---
Other, net			(4,000	)			(0.1	)			(7,000	)			(0.2	)
Provision for income taxes		$	1,706,000				30.7	%		$	1,115,000				30.2	%

 

During and the Company realized the tax benefits of the Domestic Production Activities deduction, which amounted to approximately of net income from domestic production activities in each year.

The tax effects of temporary differences which comprise the deferred tax assets and liabilities are as follows:

 

		Years ended December 31,
		2017				2016
Deferred tax assets
Accounts receivable		$	4,456			$	5,760
Inventories			9,104				14,163
Accrued expenses			157,610				234,594
Total deferred tax assets			171,170				254,517
Deferred tax liabilities
Depreciation on property, plant and equipment			(81,145	)			(161,657	)
Unrealized gain on marketable securities			(123,880	)			(90,478	)
Total deferred tax liabilities			(205,025	)			(252,135	)
Net deferred tax (liability)/asset		$	(33,855	)		$	2,382