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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income tax expense (benefit) for the years ended December 31, 2024, 2023, and 2022 consisted of the following: 
 Year Ended December 31,
 202420232022
Current taxes:
Federal$18,345 $15,229 $7,130 
State7,645 5,816 2,987 
Foreign8,787 6,553 4,123 
Total current expense
34,777 27,598 14,240 
Deferred taxes:
Federal2,385 (4,516)14,645 
State468 (936)4,039 
Foreign(240)(730)101 
Total deferred expense (benefit)
2,613 (6,182)18,785 
Income tax expense$37,390 $21,416 $33,025 
The components of income before taxes were as follows: 
 Year Ended December 31,
 202420232022
U.S.$122,080 $63,935 $90,907 
Foreign31,936 19,960 17,670 
Total$154,016 $83,895 $108,577 
 
A reconciliation of the U.S. statutory income tax rate to our effective tax rate is as follows: 
 Year Ended December 31,
 202420232022
Percent of pretax income:
At U.S. statutory tax rate21.0 %21.0 %21.0 %
State income taxes, net of federal benefit4.8 5.8 6.1 
Disallowed executive compensation1.7 3.7 1.9 
Valuation allowance0.6 0.4 2.6 
Disallowed meals and entertainment
0.6 0.9 0.1 
Stock-based compensation(3.5)(2.9)0.1 
Tax credits(0.7)(1.8)(1.0)
Realized investment losses/gains(0.6)(1.2)1.4 
Foreign source income(0.2)0.2 1.2 
Deferred tax adjustments— (0.3)(2.7)
Other0.6 (0.3)(0.3)
Effective income tax rate24.3 %25.5 %30.4 %
The net deferred tax asset (liability) balance at December 31, 2024 and 2023 consisted of the following: 
 As of December 31,
 20242023
Deferred tax assets:
Share-based compensation$13,216 $12,343 
Operating lease liabilities11,687 13,635 
Deferred compensation liability10,944 9,048 
Accrued payroll and payroll related liabilities10,086 4,541 
Net operating loss carryforwards3,553 3,508 
Tax credits2,164 1,609 
Other3,954 4,210 
Total deferred tax assets55,604 48,894 
Valuation allowance(6,561)(5,679)
Net deferred tax assets49,043 43,215 
Deferred tax liabilities:
Intangibles and goodwill(51,526)(44,454)
Operating lease right-of-use assets(5,756)(6,898)
Convertible debt investment(5,542)(7,067)
Prepaid expenses(4,811)(2,917)
Property and equipment(1,448)(2,547)
Other(5,860)(5,204)
Total deferred tax liabilities(74,943)(69,087)
Net deferred tax liabilities$(25,900)$(25,872)
As of December 31, 2024 and 2023, we had valuation allowances of $6.6 million and $5.7 million, respectively, primarily due to uncertainties relating to the ability to utilize deferred tax assets recorded for foreign losses and tax credits. The increase in valuation allowances in 2024 primarily related to an increase in foreign tax credits carryforwards.
The Company has foreign net operating losses of $3.5 million which begin to expire in 2027, if not utilized. We have federal tax credit carryforwards of $2.2 million which will begin to expire in 2030, if not utilized.
We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution.
A reconciliation of our beginning and ending amount of unrecognized tax benefits is as follows:
Unrecognized Tax Benefits
Balance at January 1, 2022
$744 
Decrease due to lapse of statute of limitations
(101)
Decrease based on tax positions related to prior years(50)
Balance at December 31, 2022593 
Decrease due to lapse of statute of limitations
(593)
Balance at December 31, 2023— 
Balance at December 31, 2024$— 
As of both December 31, 2024 and 2023, there was no unrecognized tax benefit which would affect the effective tax rate if recognized.
As of both December 31, 2024 and 2023, no potential payment of interest and penalties was accrued. When we accrue interest and penalties, we record as a component of provision for income taxes on our consolidated statement of earnings.
We file income tax returns with federal, state, local and foreign jurisdictions. Tax years 2021 through 2023 are subject to future examinations by federal tax authorities. Tax years 2018 through 2023 are subject to future examinations by state and local tax authorities. The Company is
currently under audit by the state of Wisconsin. Our foreign income tax filings are subject to future examinations by the local foreign tax authorities for tax years 2019 through 2023. The Company is currently under audit by the governments of India and Singapore. We do not expect the outcome of these audits to have a material adverse effect on our financial position or results of operations.