JanOne Inc. Annual report pursuant to Section 13 and 15(d)

16. Income Taxes (Tables)

12 Months Ended

Dec. 29, 2018

The benefit of income taxes for fiscal years 2018 and 2017 consisted of the following:

	For the fiscal years ended
	December 29, 2018			December 30, 2017
Current tax expense (benefit):
Federal	$	8		$	–
State		511			34
Foreign		–			–
Current tax expense (benefit)	$	519		$	34
Deferred tax expense - domestic		(1,246	)		(3,475	)
Deferred tax expense - foreign		–			–
Benefit of income taxes	$	(727	)	$	(3,441	)

A reconciliation of our benefit of income taxes with the federal statutory tax rate for fiscal years 2018 and 2017 is shown below:

	For the fiscal years ended
	December 29, 2018			December 30, 2017
Income tax expense at statutory rate	$	(1,155	)	$	(995	)
Portion attributable to noncontrolling interest at statutory rate		–			–
State tax expense, net of federal tax effect		771			(141	)
Permanent differences		28			55
Change in tax rates		–			(3,107	)
Change in valuation allowance		(694	)		590
Other		323			157
	$	(727	)	$	(3,441	)

Loss before benefit of income taxes and noncontrolling interest was derived from the following sources for fiscal years 2018 and 2017 as shown below:

The components of net deferred tax assets (liabilities) as of December 29, 2018 and December 30, 2017, are as follows:

	December 29, 2018			December 30, 2017
Current deferred tax assets (liabilities):
Allowance for bad debts	$	7		$	16
Accrued expenses		998			1,107
Inventory		–			80
Accrued compensation		39			23
Reserves		–			4
Prepaid expenses		(147	)		(125	)
		897			1,105
Less: valuation allowance		–			–
Total current deferred tax assets (liabilities)		897			1,105

Long term deferred tax assets (liabilities):
Net operating loss		292			1,217
Capital loss		–			–
Tax credits		256			473
Share-based compensation		271			302
Intangibles		(5,068	)		(6,615	)
Property and equipment		(103	)		(72	)
Deferred rent		12			16
Unrealized losses (gains)		129			132
Section 481(a) adjustment		–			(44	)
Section 163(j) interest		172			11
		(4,039	)		(4,580	)
Less: valuation allowance		(407	)		(1,102	)
Total long term deferred tax assets (liabilities)		(4,446	)		(5,682	)
Net deferred tax assets (liabilities)	$	(3,549	)	$	(4,577	)

The deferred tax amounts have been classified in the accompanying consolidated balance sheets as follows: