Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Before Income Taxes

Income before income taxes for the years ended December 31, 2014, 2013 and 2012 consists of the following (in thousands):

	2014		2013		2012
Domestic	$	12,939	$	13,557	$	24,124
Foreign		5,450		6,435		8,030
Total	$	18,389	$	19,992	$	32,154

Components of the Income Tax Provision (benefit)

The components of the income tax provision (benefit) for the years ended December 31, 2014, 2013 and 2012 are as follows (in thousands):

	2014			2013			2012
Current:
Federal	$	11,644		$	8,286		$	12,420
State		2,239			1,624			3,069
Foreign		1,167			1,587			1,336
Total current		15,050			11,497			16,825
Deferred:
Federal		(6,470	)		(3,935	)		(4,449	)
State		(1,095	)		(562	)		(736	)
Foreign		39			(32	)		(5,782	)
Total deferred		(7,526	)		(4,529	)		(10,967	)
Income tax provision	$	7,524		$	6,968		$	5,858

Reconciliation of the Federal Statutory Rate

A reconciliation of the federal statutory rate to Forrester’s effective tax rate for the years ended December 31, 2014, 2013 and 2012 is as follows:

	2014			2013			2012
Income tax provision at federal statutory rate		35.0	%		35.0	%		35.0	%
Increase (decrease) in tax resulting from:
State tax provision, net of federal benefit		4.2			3.4			4.9
Foreign tax rate differential		(3.2	)		(4.9	)		(2.7	)
Stock option compensation deduction		2.6			2.0			0.7
Non-deductible expenses		1.1			2.4			0.6
Change in valuation allowance		(1.0	)		0.5			(0.8	)
Foreign tax credits		—			(3.7	)		(0.9	)
Benefit upon audit settlement		—			—			(21.1	)
Out-of-period adjustment		2.5			—			—
Other, net		(0.3	)		0.2			2.5
Effective tax rate		40.9	%		34.9	%		18.2	%

Components of Deferred Income Taxes

The components of deferred income taxes as of December 31, 2014 and 2013 are as follows (in thousands):

	2014			2013
Non-deductible reserves and accruals	$	10,164		$	7,239
Stock compensation		5,086			4,539
Other assets		838			—
Net operating loss and other carryforwards		9,070			10,830
Gross deferred tax asset		25,158			22,608
Less—valuation allowance		(1,565	)		(2,200	)
Sub-total		23,593			20,408
Depreciation and amortization		(799	)		(2,945	)
Goodwill amortization		(5,224	)		(5,401	)
Other liabilities		—			(2,134	)
Deferred commissions		(5,399	)		(5,080	)
Net deferred tax asset	$	12,171		$	4,848

Summary of Changes in Deferred Tax Valuation Allowance

The following table provides a summary of the changes in the deferred tax valuation allowance for the years ended December 31, 2014, 2013 and 2012 (in thousands):

	2014			2013			2012
Deferred tax valuation allowance at January 1	$	2,200		$	2,086		$	3,077
Additions		17			801			11
Deductions		(574	)		(712	)		(1,066	)
Translation adjustments		(78	)		25			64
Deferred tax valuation allowance at December 31	$	1,565		$	2,200		$	2,086

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is summarized as follows for the years ended December 31, 2014, 2013 and 2012 (in thousands):

	2014			2013			2012
Unrecognized tax benefits at January 1	$	2,012		$	1,844		$	1,269
Additions for tax positions of prior years		6			414			112
Reductions for tax positions of prior years		—			(256	)		(37	)
Additions for tax positions of current year		121			19			1,444
Settlements		—			—			(582	)
Lapse of statute of limitations		—			—			(360	)
Translation adjustments		(3	)		(9	)		(2	)
Unrecognized tax benefits at December 31	$	2,136		$	2,012		$	1,844