Income Taxes

The components of income tax expense for the years ended December 31 are summarized as follows:



For the Years Ended December 31,	2015		2014			2013
Current:
Federal	$	4,179,000	$	3,121,000		$	4,873,000
State	34,000		84,000			69,000
Total current	4,213,000		3,205,000			4,942,000
Deferred:
Federal	976,624		620,156			1,805,215
State	38,376		(9,156		)	(1,215		)
Total deferred	1,015,000		611,000			1,804,000
Total	$	5,228,000	$	3,816,000		$	6,746,000

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,	2015			2014
Deferred income tax assets:
Accrued benefits and retirement services	$	3,262,719		$	3,061,144
Allowance for doubtful accounts	1,199,777			1,033,624
Other-than-temporary impairment of assets	428,614			323,089
Excess of book over tax depreciation	—			90,409
Postretirement benefit obligation	59,108			40,183
Reinsurance and commission payable	13,752			15,668
Net operating loss carryforward	22,000			25,000
Other	426,463			305,119
Total	5,412,433			4,894,236
Deferred income tax liabilities:
Net unrealized gain on investments	6,073,431			6,781,994
Recorded reserves for claims, net of statutory premium reserves	3,322,336			2,871,114
Excess of tax over book depreciation	986,422			—
Other	733,250			656,621
Total	11,115,439			10,309,729
Net deferred income tax liabilities	$	(5,703,006	)	$	(5,415,493	)

At December 31, 2015 and 2014, 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 of 34.4% for 2015, 34.3% for 2014 and 34.1% for 2013, respectively, to income tax expense follows:



For the Years Ended December 31,	2015			2014			2013
Anticipated income tax expense	$	6,115,306		$	4,626,555		$	7,346,074
Increase (decrease) related to:
State income taxes, net of federal income tax benefit	22,304			55,188			45,471
Tax-exempt interest income (net of amortization)	(981,712		)	(876,365		)	(772,545		)
Other, net	72,102			10,622			127,000
Provision for income taxes	$	5,228,000		$	3,816,000		$	6,746,000

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, 2015.

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 2012.