Note 7 - Income Taxes

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Income Tax Disclosure [Text Block]

7. INCOME TAXES

The Company’s effective tax rate for the six month periods ended June 30, 2024 was 21.7% compared to 20.6% for the same period in 2023. Effective rates are dependent upon components of pretax earnings and losses and the related tax effects.

Income tax expense for the six month periods ended June 30, 2024 and 2023 differed from the amounts computed by applying the U.S. federal tax rate of 21% to pretax income from continuing operations as demonstrated in the following table:

	For the Three-Months Ended
	June 30,
	2024			2023
Provision for income taxes at the statutory federal tax rates	$	(190,999	)	$	156,026
Increase (reduction) in taxes resulting from:
Tax-exempt interest income		(7,906	)		(8,794	)
Dividends received deduction		(9,189	)		(20,275	)
Proration of tax-exempt interest and dividends received deduction		4,050			7,053
Nondeductible expenses		34,430			19,952
Officer life insurance, net		(3,130	)		2,532
Other		(4,900	)		—
Total	$	(177,644	)	$	156,494

	For the Six-Months Ended
	June 30,
	2024			2023
Provision for income taxes at the statutory federal tax rates	$	404,436		$	572,680
Increase (reduction) in taxes resulting from:
Tax-exempt interest income		(15,835	)		(18,866	)
Dividends received deduction		(19,254	)		(40,735	)
Proration of tax-exempt interest and dividends received deduction		8,333			14,470
Nondeductible expenses		50,345			35,043
Officer life insurance, net		(4,568	)		(578	)
Other		(4,900	)		—
Total	$	418,557		$	562,014

Management believes it is more likely than not that all deferred tax assets will be recovered as the result of future operations, which will generate sufficient taxable income to realize the deferred tax asset.

As of June 30, 2024 and December 31, 2023, the Company does not have any capital or operating loss carryforwards. Periods still subject to IRS audit include 2020 through current year. There are currently no open tax exams. As of June 30, 2024 a significant portion of the Company's net deferred tax asset relates to unrealized losses on fixed income securities.