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Income Taxes | 12 Months Ended
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Dec. 31, 2012
Income Taxes [Abstract] |
Income Taxes | 8. Income Taxes The components of income tax expense for the years ended December 31 are summarized as follows:
For the Years Ended December 31, | 2012 | 2011
Current: |  |
Federal | $ 5,018,000 | $ 2,515,000
State | 163,000 | 29,000
Total current | 5,181,000 | 2,544,000
Deferred: |  |
Federal | (305,525) | 28,131
State | 13,525 | (7,131)
Total deferred | (292,000) | 21,000
Total | $ 4,889,000 | $ 2,565,000
For state income tax purposes, ITIC and NITIC generally pay only a gross premium tax found in premium and retaliatory taxes in the Consolidated Statements of Income. At December 31, the approximate tax effect of each component of deferred income tax assets and liabilities is summarized as follows:
For the Years Ended December 31, | 2012 | 2011
Deferred income tax assets: |  |
Accrued benefits and retirement services | $ 2,889,350 | $ 2,491,168
Postretirement benefit obligation | 52,791 | 28,026
Other-than-temporary impairment of assets | 344,701 | 434,929
Reinsurance and commissions payable | 19,087 | 38,969
Allowance for doubtful accounts | 641,920 | 414,120
Net operating loss carryforward | 12,000 | 30,000
Capital loss carryforward | 0 | 5,194
Excess of book over tax depreciation | 143,184 | 113,648
Other | 410,052 | 491,479
Total | 4,513,085 | 4,047,533
Deferred income tax liabilities: |  |
Recorded reserves for claims, net of statutory premium reserves | 399,217 | 290,318
Net unrealized gain on investments | 4,687,264 | 3,956,708
Discount accretion on tax-exempt obligations | 2,038 | 0
Other | 317,722 | 279,870
Total | 5,406,241 | 4,526,896
Net deferred income tax liabilities | $ (893,156) | $ (479,363)
At December 31, 2012 and 2011, no valuation allowance was recorded. Based upon the Company's historical results of operations, the existing financial condition of the Company and management's assessment of all other available information, management believes that it is more likely than not that the benefit of these deferred income tax assets will be realized. A reconciliation of income tax as computed for the years ended December 31 at the U.S. federal statutory income tax rate (34%) to income tax expense follows:
For the Years Ended December 31, | 2012 | 2011
Anticipated income tax expense | $ 5,467,168 | $ 3,229,638
Increase (decrease) related to: |  |
State income taxes, net of federal income tax benefit | 107,580 | 19,140
Tax-exempt interest income (net of amortization) | (757,005) | (700,300)
Other, net | 71,257 | 16,522
Provision for income taxes | $ 4,889,000 | $ 2,565,000
In accounting for uncertainty in income taxes, the Company is required to recognize in its financial statements the impact of a tax position if that position is more likely than not of being sustained on an audit, based on the technical merits of the position. In this regard, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. There were no unrecognized tax benefits or liabilities as of December 31, 2012. The amount of unrecognized tax benefit or liability may increase or decrease in the future for various reasons, including adding amounts for current tax year positions, expiration of open income tax returns due to the expiration of the applicable statute of limitations, changes in management's judgment about the level of uncertainty, status of examinations, litigation and legislative activity and the additions or eliminations of uncertain tax positions. The Company's policy is to report interest and penalties related to income taxes in the Other line item in the Consolidated Statements of Income. The Company, or one of its subsidiaries, files income tax returns in the U.S. federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S. federal or state and local examinations by taxing authorities for years before 2008.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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