Income Taxes Disclosure

3 Months Ended

Mar. 31, 2016

NOTE 3 - INCOME TAXES

For financial reporting purposes, income before taxes include the following components:

	March 31, 2016		March 31, 2015

United States	$	109,567	$	41,898

Total	$	109,567	$	41,898

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of March 31, 2016 and 2015 are as follows:

	March 31, 2016		December 31, 2015

Property and equipment bases and depreciation differences	$	4,713	$	3,070
Total deferred tax liabilities	$	4,713	$	3,070

Net operating loss carryforwards	$	84,025	$	82,918
Total deferred tax assets	$	84,025	$	82,918

Net deferred income taxes	$	79,312	$	79,848

The expense for income taxes consists of:

	March 31, 2016		March 31, 2015

Current:
Federal	$	37,347	$	17,882
State		9,886		4,733
	$	47,233	$	22,615
Deferred and other:
Federal	$	424	$	773
State		112		204

Total	$	47,769	$	23,592

The reconciliation of statutory tax rate to effective tax rate is:

	March 31, 2016	March 31, 2015

Statutory tax rate	42.84%	23.84%
Effect of lower tax brackets	-10.29%	2.90%
Meals and entertainment	-1.39%	-10.63%
Change in valuation allowance	0.00%	0.00%
Federal benefit of state tax	-2.79%	-2.79%
Other	12.45%	18.57%

Effective tax rate	43.60%	31.89%

BLACKCRAFT CULT, INC. 10-Q