Taxes On Income (Tables)

12 Months Ended

Dec. 31, 2016

Taxes On Income Tables

Provision for taxes

The provision for taxes on income consists of the following:

	Year ended December 31
	2016			2015			2014
Federal:
Current	$	(857,279	)	$	(761,435	)	$	591,434
Deferred		148,808			180,235			(150,200	)
Total tax expense (benefit)	$	(708,471	)	$	(581,200	)	$	441,234
State:
Current	$	8,774		$	8,960		$	8,910
Deferred		(10,264	)		20,152			—
Total tax expense (benefit)	$	(1,490	)	$	29,112		$	8,910
Total:
Current	$	(848,505	)	$	(752,475	)	$	600,344
Deferred		138,544			200,387			(150,200	)
Total tax expense (benefit)	$	(709,961	)	$	(552,088	)	$	450,144

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
	2016			2015			2014
Computed income tax expense (benefit) at 34%	$	(718,841	)	$	(589,886	)	$	440,812
Tax effect of:
State tax expense (benefit), net of federal tax benefit		(990	)		18,900			6,018
Other		9,870			18,898			3,314
Income tax expense (benefit)	$	(709,961	)	$	(552,088	)	$	450,144

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
	2016		2015
Deferred tax assets:
Discount on loss reserves	$	546,195	$	660,930
Unearned premium		1,340,027		1,248,509
Unearned commission income		469,730		438,337
Unearned policy fee income		347,792		359,775
State net operating loss carryforwards		1,463,188		1,384,171
Bad debt reserve		507,448		507,778
Other		301,416		307,406
Total gross deferred tax assets		4,975,796		4,906,906
Less valuation allowance		1,264,627		1,159,090
Total deferred tax assets	$	3,711,169	$	3,747,816
Deferred tax liabilities:
Policy acquisition costs	$	1,859,491	$	1,774,284
Unrealized gains (losses) on investments		4,108		(14,088	)
State tax on undistributed insurance company earnings		337,622		357,975
Federal tax liability on state deferred tax assets		167,585		174,514
Depreciation and amortization		165,017		121,044
Total deferred tax liabilities	$	2,533,823	$	2,413,729
Net deferred tax assets	$	1,177,346	$	1,334,087