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9) Income Taxes | 12 Months Ended
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Dec. 31, 2019
Notes |
9) Income Taxes | `9)```Income Taxes The Company’s income tax liability is summarized as follows:
| December 31
| 2019 |  | 2018
Current | $ 1,410,153 |  | $ 473,800
Deferred | 17,276,819 |  | 15,649,198
Total | $ 18,686,972 |  | $ 16,122,998
Significant components of the Company’s deferred tax (assets) and liabilities are approximately as follows:
| December 31
| 2019 |  | 2018
Assets |  |  |
Future policy benefits | $ (12,450,229) |  | $ (8,293,592)
Loan loss reserve | (1,053,256) |  | (938,496)
Unearned premium | (760,556) |  | (823,299)
Available for sale securities | - |  | (366,279)
Net operating loss | (438,420) |  | (593,272)
Deferred compensation | (1,996,865) |  | (1,677,118)
Deposit obligations | (619,633) |  | (610,769)
Other | (1,020,718) |  | (185,557)
Less: Valuation allowance | 2,439,394 |  | -
Total deferred tax assets | (15,900,283) |  | (13,488,382)
Liabilities |  |  |
Deferred policy acquisition costs | 15,536,717 |  | 15,255,960
Basis difference in property and equipment | 3,638,512 |  | 4,309,162
Value of business acquired | 2,074,096 |  | 1,210,690
Deferred gains | 5,169,104 |  | 6,267,373
Trusts | 1,064,387 |  | 1,064,387
Tax on unrealized appreciation | 5,694,286 |  | 1,030,008
Total deferred tax liabilities | 33,177,102 |  | 29,137,580
Net deferred tax liability | $ 17,276,819 |  | $ 15,649,198
The valuation allowance relates to differences between recorded deferred tax assets and liabilities and ultimate anticipated realization. For the year ended December 31, 2019, the Company has recorded a valuation allowance related to Kilpatrick Life Insurance Company that was acquired in December 2019. See Note 20 regarding the acquisition. The Company paid $4,861,318 and $5,701,565 in income taxes for the years ended December 31, 2019 and 2018, respectively. The Company’s income tax expense is summarized as follows for the years ended December 31:
|  | 2019 |  | 2018
Current |  |  |  |
Federal |  | $ 4,404,041 |  | $ 6,933,145
State |  | 504,272 |  | 166,567
|  | 4,908,313 |  | 7,099,712
Deferred |  |  |  |
Federal |  | (1,551,725) |  | (1,838,947)
State |  | (306,172) |  | (766,454)
|  | (1,857,897) |  | (2,605,401)
Total |  | $ 3,050,416 |  | $ 4,494,311
The reconciliation of income tax expense (benefit) at the U.S. federal statutory rates is as follows:
|  | 2019 |  | 2018
Computed expense at statutory rate |  | $ 2,928,226 |  | $ 5,497,882
State tax expense, net of federal tax benefit |  | 156,499 |  | (473,911)
Change in valuation allowance |  | 194,364 |  | -
Other, net |  | (228,673) |  | (529,660)
Income tax expense |  | $ 3,050,416 |  | $ 4,494,311
The Company’s overall effective tax rate for the years ended December 31, 2019 and 2018 was 21.9% and 17.2%, respectively. The Company’s effective tax rates differ from the U.S. federal statutory corporate income tax rate of 21% partially due to its provision for state income taxes and an increase to the valuation allowance related to Kilpatrick Life Insurance Company that increased the effective income tax rate when compared to the prior year. At December 31, 2019, the Company had no significant unrecognized tax benefits. As of December 31, 2019, the Company does not expect any material changes to the estimated amount of unrecognized tax benefits in the next twelve months. Federal and state income tax returns for 2016 through 2019 are subject to examination by taxing authorities. Net Operating Losses and Tax Credit Carryforwards:
Year of Expiration |
2020 | $ 114,601
2021 | 17,101
2022 | -
2023 | -
2024 | -
Thereafter up through 2037 | 1,701,126
| $ 1,832,828

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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