Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

Provision for Income Tax Expense (Benefit)

Our provision for income tax expense (benefit) for 2023, 2022 and 2021 consisted of the following:

	2023		2022			2021
Current federal income tax	$	408,575	$	1,280,041		$	3,998,431
Deferred federal income tax		229,397		(2,958,735	)		1,085,903
Income tax expense (benefit)	$	637,972	$	(1,678,694	)	$	5,084,334

Reconciliation of Federal Income Tax Rate

Our effective tax rate is different from the amount computed at the statutory federal rate of 21%. The reasons for such difference and the related tax effects are as follows:

	2023			2022			2021
Income (loss) before income tax expense (benefit)	$	5,063,476		$	(3,638,099	)	$	30,338,508
Tax at federal statutory rate		1,063,330			(764,001	)		6,371,087
Tax-exempt interest		(1,328,312	)		(1,446,102	)		(1,491,154	)
Proration		351,415			384,944			401,717
Dividends received deduction		(77,348	)		(93,675	)		(115,713	)
Stock options		595,602			216,893			148,320
Additional tax paid for prior year		159,261			(6,071	)		(15,874	)
Other, net		(125,976	)		29,318			(214,049	)
Income tax expense (benefit)	$	637,972		$	(1,678,694	)	$	5,084,334

Deferred Tax Assets and Deferred Tax Liabilities

The tax effects of temporary differences that give rise to significant portions of our deferred tax assets and deferred tax liabilities at December 31, 2023 and 2022 are as follows:

	2023			2022
Deferred tax assets:
Unearned premium	$	18,130,477		$	17,560,126
Loss reserves		10,067,846			9,712,582
Net unrealized losses		8,743,238			11,088,307
Net state operating loss carryforward - DGI Parent		8,072,420			8,068,185
Other		1,492,635			1,472,110
Total gross deferred tax assets		46,506,616			47,901,310
Less valuation allowance		(8,072,420	)		(8,068,185	)
Net deferred tax assets		38,434,196			39,833,125
Deferred tax liabilities:
Deferred policy acquisition costs		15,759,115			15,365,749
Loss reserve transition adjustment		564,002			856,267
Other		2,578,554			2,008,092
Total gross deferred tax liabilities		18,901,671			18,230,108
Net deferred tax asset	$	19,532,525		$	21,603,017