Taxes On Income (Tables)

12 Months Ended

Dec. 31, 2013

Taxes On Income Tables

Provision for taxes

The provision for taxes on income consists of the following:

	Year ended December 31
	2013		2012			2011
Federal:
Current	$	41,922	$	959,935		$	1,670,957
Deferred		286,546		60,600			276,145
Total	$	328,468	$	1,020,535		$	1,947,102
State:
Current	$	8,953	$	8,949		$	8,982
Deferred		299,686		(128,176	)		54,208
Total	$	308,639	$	(119,227	)	$	63,190
Total:
Current	$	50,875	$	968,884		$	1,679,939
Deferred		586,232		(67,576	)		330,353
Total	$	637,107	$	901,308		$	2,010,292

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 rate of 34% on income as shown in the following table:

	Year ended December 31
	2013		2012			2011
Computed income tax expense at 34%	$	421,863	$	970,711		$	1,955,058
Tax effect of:
State tax, net of federal tax benefit		204,221		(78,259	)		41,233
Other		11,023		8,856			14,001
Income tax expense	$	637,107	$	901,308		$	2,010,292

Components of net deferred tax assets

Significant components of the Company’s net deferred tax assets and liabilities are as follows:

	Year ended December 31
	2013			2012
Deferred tax assets
Discount on loss reserves	$	871,495		$	1,241,447
Unearned premiums		1,056,093			1,104,384
Unearned commission income		369,882			388,624
Unearned policy fee income		344,176			365,007
State net operating loss carryforwards		953,595			771,172
Bad debt reserve		401,856			430,944
Other		184,333			108,761
Total gross deferred tax assets		4,181,430			4,410,339
Less valuation allowance		649,292			223,423
Net deferred tax assets	$	3,532,138		$	4,186,916
Deferred tax liabilities
Policy acquisition costs	$	1,525,962		$	1,588,442
Unrealized gains (losses) on investments		(2,977	)		62,489
State tax on undistributed insurance company earnings		357,669			337,112
Federal tax liability on state deferred tax assets		181,210			275,514
Depreciation and amortization		97,114			32,430
Total gross deferred tax liabilities	$	2,158,978		$	2,295,987
Net deferred tax assets	$	1,373,160		$	1,893,929