Taxes On Income (Tables)

12 Months Ended

Dec. 31, 2014

Taxes On Income Tables

Provision for taxes

The provision for taxes on income consists of the following:

	Year ended December 31
	2014			2013		2012
Federal:
Current	$	591,434		$	41,922	$	959,935
Deferred		(150,200	)		286,546		60,600
Total	$	441,234		$	328,468	$	1,020,535
State:
Current	$	8,910		$	8,953	$	8,949
Deferred		—			299,686		(128,176	)
Total	$	8,910		$	308,639	$	(119,227	)
Total:
Current	$	600,344		$	50,875	$	968,884
Deferred		(150,200	)		586,232		(67,576	)
Total	$	450,144		$	637,107	$	901,308

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
	2014		2013		2012
Computed income tax expense at 34%	$	440,812	$	421,863	$	970,711
Tax effect of:
State tax, net of federal tax benefit		6,018		204,221		(78,259	)
Other		3,314		11,023		8,856
Income tax expense	$	450,144	$	637,107	$	901,308

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
	2014		2013
Deferred tax assets:
Discount on loss reserves	$	807,148	$	871,495
Unearned premium		1,158,568		1,056,093
Unearned commission income		402,566		369,882
Unearned policy fee income		355,000		344,176
State net operating loss carryforwards		1,133,946		953,595
Bad debt reserve		508,206		401,856
Other		310,774		184,333
Total gross deferred tax assets		4,676,208		4,181,430
Less valuation allowance		853,334		649,292
Net deferred tax assets	$	3,822,874	$	3,532,138
Deferred tax liabilities:
Policy acquisition costs	$	1,627,280	$	1,525,962
Unrealized gains (losses) on investments		1,851		(2,977	)
State tax on undistributed insurance company earnings		374,258		357,669
Federal tax liability on state deferred tax assets		189,771		181,210
Depreciation and amortization		111,180		97,114
Total gross deferred tax liabilities	$	2,304,340	$	2,158,978
Net deferred tax assets	$	1,518,534	$	1,373,160