Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Before Income Taxes

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

	Years Ended December 31,
	2020		2019			2018
Domestic	$	7,237	$	(14,637	)	$	17,718
Foreign		5,696		5,038			5,807
Total	$	12,933	$	(9,599	)	$	23,525

Components of the Income Tax Expense (Benefit)

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

	Years Ended December 31,
	2020			2019			2018
Current:
Federal	$	603		$	618		$	2,278
State		2,054			911			1,173
Foreign		1,963			2,399			1,763
Total current		4,620			3,928			5,214
Deferred:
Federal		490			(1,454	)		2,111
State		(1,641	)		(2,005	)		667
Foreign		(526	)		(498	)		153
Total deferred		(1,677	)		(3,957	)		2,931
Income tax expense (benefit)	$	2,943		$	(29	)	$	8,145

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,
	2020			2019			2018
Income tax provision at federal statutory rate		21.0	%		21.0	%		21.0	%
Increase (decrease) in tax resulting from:
State tax provision, net of federal benefit		2.6			8.3			6.2
Foreign tax rate differential		(0.2	)		0.4			(0.2	)
Stock option compensation		5.7			(1.2	)		(1.1	)
Withholding taxes		3.3			(3.5	)		2.1
Non-deductible expenses		2.2			(9.8	)		5.3
Change in valuation allowance		(5.8	)		2.3			—
Foreign subsidiary income subject to U.S. tax		(4.3	)		(7.4	)		—
Change in tax legislation		(1.9	)		(1.2	)		1.9
Audit settlements		—			(8.3	)		—
Other, net		0.2			(0.3	)		(0.6	)
Effective tax rate		22.8	%		0.3	%		34.6	%

Components of Deferred Income Taxes

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

	As of December 31,
	2020			2019
Non-deductible reserves and accruals	$	2,814		$	2,743
Net operating loss and other carryforwards		8,719			13,049
Stock compensation		1,935			2,651
Lease liability		22,842			17,382
Gross deferred tax asset		36,310			35,825
Less - valuation allowance		(1,237	)		(2,274	)
Sub-total		35,073			33,551
Other liabilities		(751	)		(1,085	)
Depreciation and amortization		(1,091	)		(1,567	)
Goodwill and intangible assets		(27,319	)		(32,120	)
Operating lease right-of-use assets		(19,201	)		(15,005	)
Deferred commissions		(6,665	)		(5,706	)
Net deferred tax asset (liability)	$	(19,954	)	$	(21,932	)

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, 2020, 2019, and 2018 (in thousands):

	2020			2019			2018
Deferred tax valuation allowance at January 1	$	2,274		$	2,574		$	2,686
Additions		52			30			74
Deductions		(1,134	)		(356	)		(139	)
Change in tax legislation		2			—			—
Translation adjustments		43			26			(47	)
Deferred tax valuation allowance at December 31	$	1,237		$	2,274		$	2,574

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, 2020, 2019, and 2018 (in thousands):

	2020			2019			2018
Unrecognized tax benefits at January 1	$	345		$	799		$	806
Reductions for tax positions of prior years		(344	)		(458	)		—
Additions for tax positions of current year		—			—			—
Settlements		—			—			—
Translation adjustments		27			4			(7	)
Unrecognized tax benefits at December 31	$	28		$	345		$	799