Taxes On Income (Tables)

12 Months Ended

Dec. 31, 2015

Taxes On Income Tables

Provision for taxes

The provision for taxes on income consists of the following:

	Year ended December 31
	2015			2014			2013
Federal:
Current	$	(761,435	)	$	591,434		$	41,922
Deferred		180,235			(150,200	)		286,546
Total tax expense (benefit)	$	(581,200	)	$	441,234		$	328,468
State:
Current	$	8,960		$	8,910		$	8,953
Deferred		20,152			—			299,686
Total tax expense	$	29,112		$	8,910		$	308,639
Total:
Current	$	(752,475	)	$	600,344		$	50,875
Deferred		200,387			(150,200	)		586,232
Total tax expense (benefit)	$	(552,088	)	$	450,144		$	637,107

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
	2015			2014		2013
Computed income tax expense (benefit) at 34%	$	(589,886	)	$	440,812	$	421,863
Tax effect of:
State tax, net of federal tax benefit		18,900			6,018		204,221
Other		18,898			3,314		11,023
Income tax expense (benefit)	$	(552,088	)	$	450,144	$	637,107

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
	2015			2014
Deferred tax assets:
Discount on loss reserves	$	660,930		$	807,148
Unearned premium		1,248,509			1,158,568
Unearned commission income		438,337			402,566
Unearned policy fee income		359,775			355,000
State net operating loss carryforwards		1,384,171			1,133,946
Bad debt reserve		507,778			508,206
Other		307,406			310,774
Total gross deferred tax assets		4,906,906			4,676,208
Less valuation allowance		1,159,090			853,334
Total deferred tax assets	$	3,747,816		$	3,822,874
Deferred tax liabilities:
Policy acquisition costs	$	1,774,284		$	1,627,280
Unrealized gains (losses) on investments		(14,088	)		1,851
State tax on undistributed insurance company earnings		357,975			374,258
Federal tax liability on state deferred tax assets		174,514			189,771
Depreciation and amortization		121,044			111,180
Total deferred tax liabilities	$	2,413,729		$	2,304,340
Net deferred tax assets	$	1,334,087		$	1,518,534