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9) Income Taxes | 12 Months Ended
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Dec. 31, 2020
Disclosure Text Block [Abstract] |
9) Income Taxes | 9) Income Taxes The Company’s income tax liability is summarized as follows:
| December 31
| 2020 |  | 2019
Current | $ 2,595,877 |  | $ 1,410,153
Deferred | 22,662,923 |  | 17,276,819
Total | $ 25,258,800 |  | $ 18,686,972
Significant components of the Company’s deferred tax (assets) and liabilities are approximately as follows:
| December 31
| 2020 |  | 2019
Assets |  |  |
Future policy benefits | $ (12,657,045) |  | $ (12,450,229)
Loan loss reserve | (5,352,942) |  | (1,053,256)
Unearned premium | (699,011) |  | (760,556)
Net operating loss | (334,085) |  | (438,420)
Deferred compensation | (2,833,298) |  | (1,996,865)
Deposit obligations | (610,041) |  | (619,633)
Other | (1,269,533) |  | (1,020,718)
Less: Valuation allowance | 961,920 |  | 2,439,394
Total deferred tax assets | (22,794,035) |  | (15,900,283)
Liabilities |  |  |
Deferred policy acquisition costs | 16,430,001 |  | 15,536,717
Basis difference in property, equipment and real estate | 5,312,787 |  | 3,638,512
Value of business acquired | 1,880,602 |  | 2,074,096
Deferred gains | 12,124,226 |  | 5,169,104
Trusts | 1,064,387 |  | 1,064,387
Tax on unrealized appreciation | 8,644,955 |  | 5,694,286
Total deferred tax liabilities | 45,456,958 |  | 33,177,102
Net deferred tax liability | $ 22,662,923 |  | $ 17,276,819
The valuation allowance relates to differences between recorded deferred tax assets and liabilities and ultimate anticipated realization. The Company has recorded a valuation allowance related to Kilpatrick Life Insurance Company that was acquired in December 2019. The Company paid $11,813,120 and $4,861,318 in income taxes for the years ended December 31, 2020 and 2019, respectively. The Company’s income tax expense is summarized as follows for the years ended December 31:
|  | 2020 |  | 2019
Current |  |  |  |
Federal |  | $ 10,678,612 |  | $ 4,404,041
State |  | 2,320,233 |  | 504,272
|  | 12,998,845 |  | 4,908,313
Deferred |  |  |  |
Federal |  | 2,677,943 |  | (1,551,725)
State |  | 176,726 |  | (306,172)
|  | 2,854,669 |  | (1,857,897)
Total |  | $ 15,853,514 |  | $ 3,050,416
The reconciliation of income tax expense at the U.S. federal statutory rates is as follows:
|  | 2020 |  | 2019
Computed expense at statutory rate |  | $ 15,004,527 |  | $ 2,928,226
State tax expense, net of federal tax benefit |  | 1,972,598 |  | 156,499
Change in valuation allowance |  | (1,477,474) |  | 194,364
Other, net |  | 353,863 |  | (228,673)
Income tax expense |  | $ 15,853,514 |  | $ 3,050,416
The Company’s overall effective tax rate for the years ended December 31, 2020 and 2019 was 22.2% and 21.9% respectively. The Company’s effective tax rates differ from the U.S. federal statutory rate of 21% partially due to its provision for state income taxes and a decrease to the valuation allowance related to Kilpatrick Life Insurance Company that decreased the effective income tax rate when compared to the prior year. At December 31, 2020, the Company had no significant unrecognized tax benefits. As of December 31, 2020, 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 2017 through 2020 are subject to examination by taxing authorities. Net Operating Losses and Tax Credit Carryforwards:
Year of Expiration |
2021 | $ 17,100
2022 | -
2023 | -
2024 | -
2025 | -
Thereafter up through 2037 | 1,405,155
| $ 1,422,255

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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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