Income Taxes

The expense for income taxes consists of the following (in thousands):



	Year Ended
	December 30, 2012			January 1, 2012			January 2, 2011
Current income tax expense	$	6,111		$	5,885		$	4,564
Tax (deficiency) benefit from stock based compensation recorded in equity	(2,567		)	771			4,595
Deferred income tax expense (benefit)	1,030			(761		)	(1,763		)
Total income tax expense	$	4,574		$	5,895		$	7,396

A reconciliation of the statutory Federal income tax rate to the effective tax rate is as follows:



	Year Ended
	December 30, 2012		January 1, 2012		January 2, 2011
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%
Other, net	0.3	%	(0.8	)%	(0.7	)%
Effective tax rate	35.3	%	34.2	%	34.3	%

Deferred income taxes reflect the net tax effect of temporary differences between amounts recorded for financial reporting purposes and amounts used for tax purposes. The major components of deferred tax assets are as follows (in thousands):



	December 30, 2012			January 1, 2012
Deferred tax assets:
Current:
Reserves and allowances	$	722		$	583
Deferred rent	86			74
Inventory	295			244
Other	141			18
Noncurrent:
Stock-based compensation	8,657			10,060
Deferred rent	656			721
Financing obligation	219			240
Other	243			31
Gross deferred tax assets	$	11,019		$	11,971
Valuation allowance	(27		)	—
Gross deferred tax assets, net of valuation allowance	$	10,992		$	11,971

Deferred tax liabilities:
Current:
Prepaid expenses	$	(301	)	$	(230	)
Other	(17		)	—
Noncurrent:
Leased building	(234		)	(251		)
Excess of book over tax depreciation and amortization	(1,728		)	(1,748		)
Gross deferred tax liabilities	(2,280		)	(2,229		)
Net deferred tax assets	$	8,712		$	9,742

At December 30, 2012, the Company had foreign net operating loss carryforwards for income tax purposes of approximately $0.1 million. If not utilized, the foreign net operating loss carryforwards will expire in 2018.

At December 30, 2012, the Company had a valuation allowance of $27,000. The valuation allowance relates to foreign net operating losses that would be realizable only upon the generation of future taxable income in the jurisdiction in which the losses were incurred.

Income taxes payable at December 30, 2012 and January 1, 2012 were approximately $2.7 million and $0.8 million, respectively, and were included in accrued liabilities.

The Company has not provided for deferred taxes on unremitted earnings of subsidiaries outside the United States where such earnings are permanently reinvested. At December 30, 2012, unremitted earnings of foreign subsidiaries were approximately $0.9 million. The amount of unrecognized deferred tax liability associated with these unremitted earnings is approximately $0.2 million. If these earnings were distributed in the form of dividends or otherwise, the Company would be subject to U.S. income taxes less an adjustment for applicable foreign tax credits.

The Company is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2009.

The tax benefit realized for the tax deduction from stock option exercises was approximately $0.6 million, $1.8 million and $5.3 million for the years ended December 30, 2012, January 1, 2012 and January 2, 2011, respectively.