8. Income Taxes

Deferred income taxes are provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for income tax reporting purposes. Deferred income tax (assets) liabilities relate to:

	2015			2014			2013
Property, plant and equipment	$	6,694,885		$	6,503,597		$	6,184,873
Other		99,989			92,531			208,938
Total deferred income tax liabilities		6,794,874			6,596,128			6,393,811

Other postretirement benefits		(281,154	)		(1,030,203	)		(787,087	)
Inventories		(807,061	)		(829,876	)		(848,364	)
Allowance for doubtful accounts		(124,351	)		(105,296	)		(104,695	)
Intangible assets		(299,137	)		(396,541	)		(373,482	)
Accrued compensation		(252,297	)		(203,180	)		(158,866	)
Pensions		(8,616,582	)		(9,275,949	)		(3,828,224	)
Total deferred income tax assets		(10,380,582	)		(11,841,045	)		(6,100,718	)
Net deferred income tax (assets) liabilities	$	(3,585,708	)	$	(5,244,917	)	$	293,093

Income before income taxes consists of:

	2015		2014		2013
Domestic	$	4,308,809	$	8,087,552	$	7,139,039
Foreign		3,712,166		3,441,211		2,974,856
	$	8,020,975	$	11,528,763	$	10,113,895

The provision for income taxes follows:

	2015			2014		2013
Current:
Federal	$	1,337,417		$	2,339,917	$	1,942,271
Foreign		1,054,694			991,257		871,949
State		140,139			295,554		162,952
Deferred:
Federal		(223,530)			164,830		241,821
State		(14,788	)		75,729		(7,019	)
	$	2,293,932		$	3,867,287	$	3,211,974

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows:

	2015				2014				2013
	Amount		Percent		Amount		Percent		Amount		Percent
Income taxes using U.S. federal statutory rate	$ 2,727,131		34	%	$ 3,919,779		34	%	$ 3,438,724		34	%
State income taxes, net of federal benefit	82,987		1		249,324		2		99,245		1
Impact of foreign subsidiaries on effective tax rate	(388,132	)	(5	)	(76,914	)	(1	)	(103,878	)	(1	)
Impact of manufacturers deduction on effective tax rate	(91,018	)	(1	)	(185,993	)	(1	)	(138,127	)	(1	)
Other—net	(37,036	)	-		(38,909	)	-		(83,990	)	(1	)
	$ 2,293,932		29	%	$ 3,867,287		34	%	$ 3,211,974		32	%

Total income taxes paid were $2,348,865 in 2015, $3,989,978 in 2014 and $2,568,708 in 2013.

United States income taxes have been provided on the undistributed earnings of foreign subsidiaries ($13,308,709 at January 2, 2016) only where necessary because such earnings are intended to be reinvested abroad indefinitely or repatriated only when substantially free of such taxes. The Company would be required to accrue and pay United States income taxes to repatriate the funds held by foreign subsidiaries not otherwise provided.

During 2015, 2014 and 2013, the Company received tax benefits of $0, $8,882, and $0, respectively, as a result of the exercise and sale of incentive stock options that resulted in the disqualification of those incentive stock options and the exercise of non-qualified stock options during the year. The tax benefit associated with the exercise of the incentive and non-qualified stock options has been recorded to common stock.

A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:

	2015			2014			2013

Balance at beginning of year	$	248,645		$	220,289		$	499,624
Increases for positions taken during the current period		27,947			50,735			49,636
Decreases relating to settlements		—			—			(263,856	)
Decreases resulting from the expiration of the statute of limitations		(26,810	)		(22,379	)		(65,115	)
Balance at end of year	$	249,782		$	248,645		$	220,289

The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2012 and non-U.S. income tax examinations by tax authorities prior to 2009.

Included in the balance at January 2, 2016, are $164,856 of unrecognized tax benefits that would affect the annual effective tax rate. In 2015, the Company recognized accrued interest related to unrecognized tax benefits in income tax expense. The Company had approximately $37,000 of accrued interest at January 2, 2016.

The total amount of unrecognized tax benefits could increase or decrease within the next twelve months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under ASC 740. The Company believes that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months.