COFFEE HOLDING CO INC Income Taxes Disclosure

NOTE 8 - INCOME TAXES:

 

The Company’s provision for income taxes in 2025 and 2024 consisted of the following:

 SCHEDULE OF PROVISION FOR INCOME TAXES

		2025				2024
Current:
Federal			128,205				82,332
State and local			26,985				18,544
Total			155,190				100,876
Deferred:
Federal			293,573				611,317
State and local			68,926				137,692
Total			362,499				749,009
Provision for income taxes			517,689				849,885

 

 

A reconciliation of the difference between the expected income tax rate using the statutory U.S. federal tax rate and the Company’s effective tax rate is as follows:

 SCHEDULE OF EFFECTIVE INCOME TAX RATE

		2025				2024
Expense (Benefit) from for tax at the federal statutory rate			398,932				644,259
Other permanent differences			2,137				23,718
Return to provision			6,083				29,959
Deferred Tax change in effective rate			26,567				6,838
State and local tax, net of federal			83,970				145,111
Expense (Benefit from) income taxes			517,689				849,885
Effective income tax rate			27	%			28	%

 

The tax effects of the temporary differences that give rise to the deferred tax assets and liabilities as of October 31, 2025 and 2024 are as follows:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

		2025				2024
Deferred tax assets:
Accounts receivable			79,565				37,051
Unrealized loss			90,792				-
Deferred rent			2,790				942
Deferred compensation			32,737				31,233
Net operating loss			-				503,413
Stock-based compensation			638,115				645,892
Inventory			120,742				93,879
Total deferred tax asset			964,741				1,312,410
Deferred tax liabilities:
Intangible assets acquired			116,330				95,347
Unrealized gain			-				132,625
Buildings, machinery and equipment			618,512				492,040
Total deferred tax liabilities			734,842				720,012
Net deferred tax asset			229,899				592,398

 

A valuation allowance was not provided at October 31, 2025 or 2024. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

 

 

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are expected to be deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced.

 

As of October 31, 2025 and 2024, the Company did not have any unrecognized tax benefits or open tax positions. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of October 31, 2025, and 2024, the Company had no accrued interest or penalties related to income taxes. The Company currently has no federal or state tax examinations in progress.

 

The Company files a U.S. federal income tax return and California, Colorado, Connecticut, Florida, Idaho, Illinois, Kansas, Louisiana, Michigan, Massachusetts, Montana, New Jersey, New York, New York City, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, and Virginia state tax returns. The Company’s federal income tax return is no longer subject to examination by the federal taxing authority for years before fiscal 2022. The Company’s California, Colorado and New Jersey and Texas income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2022. The Company’s Oregon, New York, Kansas, South Carolina, Rhode Island, Connecticut and Michigan income tax returns are no longer subject to examination by their respective taxing authorities for the years before fiscal 2022.

 

As of October 31, 2025, and 2024, the Company had cumulative net operating loss carryforwards of approximately $0 and $1,956,523 respectively.

 

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, extending key provisions of the 2017 Tax Cuts and Jobs Act including, but not limited to, deductions for domestic research and development expenditures. The Company is currently evaluating OBBBA; however, the Company does not expect OBBBA to have a material impact on the Company’s consolidated financial statements.