v3.26.1
Note 11 - Income Taxes
 12 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

NOTE 11 - INCOME TAXES 

 

The Company accounts for income taxes under ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities.

 

Income tax expense

 

Income tax expense (benefit) from continuing operations for the years ended March 31,2026, and 2025 consisted of the following:

 

March 31,

  

2026

    

2025

  

Current:

                

Federal

   $ 0     $ 0  

State

     1,500       1,500  

Foreign

     0       0  

Deferred:

                

Federal

     0       0  

State

     0       0  

Foreign

     0       0  

Total income tax expense

   $ 1,500     $ 1,500  

 

Deferred income taxes

 

Deferred tax assets and liabilities at March 31, 2026, and 2025 consisted of the following:

 

March 31,

  

2026

    

2025

  

Deferred tax assets:

                

Allowance for doubtful accounts

   $ 255,478     $ 109,491  

Federal net operating loss carryforward

     318,661       303,674  

State net operating loss carryforward

     212,640       206,440  

Federal tax credit carryforwards

     316,772       316,772  

State tax credit carryforwards

     45,366       45,366  

Stock Compensation

     42,715       42,715  

Depreciation – Federal

     0       33,466  

Depreciation – State

     0       8,739  

Total deferred tax assets

     1,191,632       1,066,663  

Less: valuation allowance

     (1,191,632 )     (1,066,663 )

Net deferred tax assets

     0       0  

Deferred tax liabilities:

                

Depreciation - Federal

     (32,131 )     0  

Depreciation – State

     (7,424 )     0  

Total deferred tax liabilities

     (39,555 )     0  

Less: valuation allowance

     39,555       0  

Net deferred tax liability

   $ 0     $ 0  

 

The valuation allowance increased by $85,414 during the year ended March 31, 2026. Management believes it is more likely than not that the remaining deferred tax assets will not be realized through future taxable income.

 

As of March 31, 2026, the Company has federal net operating loss carryforwards of $1,517,432 and state net operating loss carryforwards of $2,362,670, which may be used to offset future taxable income.

 

Effective tax rate reconciliation

 

The Company’s effective tax rate reconciliation for the years ended March 31, 2026, and 2025 was as follows:

 

   

% of pretax income

    

2026

    

% of pretax income

    

2025

  

Tax at U.S. federal statutory rate (21.0%)

     (21.0 %)   $ (20,764 )     (21.0 %)   $ (25,527 )

State and local income taxes, net of federal benefit

     (4.8 %)     (4,701 )     (9.6 %)     (11,580 )

Foreign tax effects

     0.0 %     0       0.0 %     0  

Effect of changes in tax laws or rates enacted in the current period

     0.0 %     0       0.0 %     0  

Effect of cross-border tax laws

     0.0 %     0       0.0 %     0  

Tax credits

     (0.0 %)     0       0.0 %     0  

Changes in valuation allowance

     21.4 %     21,188       29.1 %     35,328  

Nontaxable or nondeductible items

     5.9 %     5,777       2.7 %     3,279  

Changes in unrecognized tax benefits

     0.0 %     0       0.0 %     0  

Income tax expense and effective tax rate

     1.5 %   $ 1,500       1.2 %   $ 1,500  

 

The Company pays taxes to only one state – New Jersey.

 

Income taxes paid

 

Income taxes paid (net of refunds received) for the years ended March 31, 2026, and 2025 were as follows:

 

March 31,

  

2026

    

2025

  

Federal

   $ 0     $ 0  

State

     1,500       1,500  

Foreign

     0       0  

Total

   $ 1,500     $ 1,500  

 

The following jurisdictions individually represented 5% or more of total income taxes paid (net of refunds received) for the year ended March 31, 2026, and 2025:

 

Jurisdiction

  

Amount

  

United States — Federal

   $ 0  

New Jersey

     1,500  

 

Unrecognized tax benefits

 

A reconciliation of the Company’s unrecognized tax benefits for the years ended March 31, 2026, and 2025 are as follows:

 

March 31,

  

2026

    

2025

  

Unrecognized tax benefits at April1,

   $ 0     $ 0  

Increases for tax positions taken in the current year

     0       0  

Increases for tax positions taken in prior years

     0       0  

Decreases for tax positions taken in prior years

     0       0  

Settlements

     0       0  

Lapse of statute of limitations

     0       0  

Unrecognized tax benefits at March 31,

   $ 0     $ 0  

 

At March 31, 2026, and 2025, unrecognized tax benefits that, if recognized, would affect the effective tax rate were $0.

 

Interest and penalties

 

The Company recognizes interest and penalties related to uncertain tax positions as a component of selling, general and administrative expenses. There were no interest and penalties for the years ended March 31, 2026, and 2025.

 

Open tax years

 

The Company files income tax returns in the United States federal jurisdiction and the State of New Jersey jurisdiction, and in certain foreign jurisdictions. The Company’s federal, state, and foreign income tax returns for tax years after March 31, 2023, for federal and March 31, 2022, for the State of New Jersey remain subject to examination by taxing authorities.