Taxes On Income (Tables)

12 Months Ended

Dec. 31, 2012

Taxes On Income Tables

Provision for taxes

The provision for taxes on income consists of the following:

	Year ended December 31
	2012			2011		2010
Federal:
Current	$	959,935		$	1,670,957	$	1,043,492
Deferred		60,600			276,145		182,012
Total	$	1,020,535		$	1,947,102	$	1,225,504
State:
Current	$	8,949		$	8,982	$	8,931
Deferred		(128,176	)		54,208		(343,006	)
Total	$	(119,227	)	$	63,190	$	(334,075	)
Total:
Current	$	968,884		$	1,679,939	$	1,052,423
Deferred		(67,576	)		330,353		(160,994	)
Total	$	901,308		$	2,010,292	$	891,429

Reconcilation of income tax provision and expected income tax

The income tax provision reflected in the consolidated statements of operations is different than the expected federal income tax on income as shown in the following table:

	Year ended December 31
	2012			2011		2010
Computed income tax expense	$	970,711		$	1,955,058	$	1,094,997
Tax effect of:
State tax, net of federal tax benefit		(78,259	)		41,233		(220,490	)
Other		8,856			14,001		16,922
Income tax expense	$	901,308		$	2,010,292	$	891,429

Components of net deferred tax assets

The components of the net federal income tax asset included in the financial statements as required by the assets and liability method are as follows:

	Year ended December 31
	2012		2011
Deferred tax assets
Discount on loss reserves	$	1,241,447	$	1,331,432
Unearned premiums		1,104,384		1,099,386
Unearned commission income		388,624		385,637
Unearned policy fee income		365,007		379,717
State income taxes		275,235		281,789
Bad debt reserve		430,944		477,096
Other		108,761		114,191
Total deferred tax assets	$	3,914,402	$	4,069,248
Deferred tax liabilities
Policy acquisition costs	$	1,588,442	$	1,748,455
Unrealized gains on investments		62,489		494,343
State tax on undistributed insurance company earnings		337,112		409,005
Depreciation and amortization		32,430		22,945
Total deferred tax liabilities	$	2,020,473	$	2,674,748
Net deferred tax assets	$	1,893,929	$	1,394,500