Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Before Income Taxes

Income before income taxes consists of the following (in thousands):

	Years Ended December 31,
	2017		2016		2015
Domestic	$	20,061	$	22,303	$	11,347
Foreign		7,310		8,406		7,973
Total	$	27,371	$	30,709	$	19,320

Components of the Income Tax Provision (benefit)

The components of the income tax provision (benefit) are as follows (in thousands):

	Years Ended December 31,
	2017		2016			2015
Current:
Federal	$	2,587	$	6,094		$	5,103
State		1,060		2,330			1,252
Foreign		2,159		2,032			1,954
Total current		5,806		10,456			8,309
Deferred:
Federal		5,550		2,719			(723	)
State		700		59			(232	)
Foreign		175		(176	)		(30	)
Total deferred		6,425		2,602			(985	)
Income tax provision	$	12,231	$	13,058		$	7,324

Reconciliation of the Federal Statutory Rate

A reconciliation of the federal statutory rate to Forrester’s effective tax rate is as follows:

	Years Ended December 31,
	2017			2016			2015
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		4.0			5.0			4.0
Foreign tax rate differential		(3.4	)		(4.4	)		(3.0	)
Stock option compensation deduction		0.1			0.6			2.5
Withholding taxes		1.7			0.5			0.3
Non-deductible expenses		1.8			1.5			1.7
Change in valuation allowance		3.9			3.2			(0.7	)
Change in tax legislation		5.8			—			(3.1	)
Audit settlements		(4.0	)		—			—
Other, net		(0.2	)		1.1			1.2
Effective tax rate		44.7	%		42.5	%		37.9	%

Components of Deferred Income Taxes

The components of deferred income taxes are as follows (in thousands):

	As of December 31,
	2017			2016
Non-deductible reserves and accruals	$	4,936		$	8,189
Net operating loss and other carryforwards		8,528			7,560
Stock compensation		2,644			5,327
Depreciation and amortization		402			1,196
Other assets		46			50
Gross deferred tax asset		16,556			22,322
Less - valuation allowance		(2,686	)		(2,193	)
Sub-total		13,870			20,129
Other liabilities		(911	)		(453	)
Goodwill amortization		(5,677	)		(5,013	)
Deferred commissions		(3,873	)		(4,928	)
Net deferred tax asset	$	3,409		$	9,735

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, 2017, 2016 and 2015 (in thousands):

	2017			2016			2015
Deferred tax valuation allowance at January 1	$	2,193		$	1,534		$	1,565
Additions		1,439			1,256			150
Deductions		(70	)		(455	)		(134	)
Change in tax legislation		(954	)		—			—
Translation adjustments		78			(142	)		(47	)
Deferred tax valuation allowance at December 31	$	2,686		$	2,193		$	1,534

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, 2017, 2016 and 2015 (in thousands):

	2017			2016			2015
Unrecognized tax benefits at January 1	$	1,774		$	1,910		$	2,136
Additions for tax positions of prior years		—			—			36
Reductions for tax positions of prior years		—			(31	)		—
Additions for tax positions of current year		—			75			46
Settlements		(986	)		(163	)		(303	)
Lapse of statute of limitations		—			—			—
Translation adjustments		18			(17	)		(5	)
Unrecognized tax benefits at December 31	$	806		$	1,774		$	1,910