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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

9) Income Taxes

 

The Company’s income tax liability is summarized as follows:

 

   2024   2023 
   December 31, 
   2024   2023 
Current  $(725,175)  $246,437 
Deferred   13,804,432    13,506,544 
Total  $13,079,257   $13,752,981 

 

The significant components of the Company’s deferred tax assets and liabilities are approximately as follows:

 

   2024   2023 
   December 31, 
   2024   2023 
Assets          
Future policy benefits  $15,144,640   $14,902,816 
Loan loss reserve and allowances   1,395,203    1,908,243 
Unearned premium   422,453    534,203 
Net operating loss   1,245,888    1,050,770 
Deferred compensation   2,033,686    2,138,385 
Tax on unrealized appreciation   -    491,271 
Total deferred tax assets   20,241,870    21,025,688 
           
Liabilities          
Deferred policy acquisition costs   19,104,454    18,478,562 
Basis difference in property, equipment and real estate   8,973,198    11,054,092 
Value of business acquired   1,573,236    1,778,199 
Deferred gains   1,365,803    1,308,365 
Trusts   1,064,387    1,064,387 
Intangibles   717,336    516,210 
Other   534,311    332,417 
Tax on unrealized appreciaton   713,577    - 
Total deferred tax liabilities   34,046,302    34,532,232 
Net deferred tax liability  $13,804,432   $13,506,544 

 

 

Prior period amounts have been adjusted to conform to the current period presentation.

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2024 and 2023

 

9) Income Taxes (Continued)

 

The Company’s income tax expense is summarized as follows:

 

   2024   2023 
   December 31, 
   2024   2023 
Current          
Federal  $7,182,377   $4,091,306 
State   73,654    209,537 
Total Current Income Tax Expense (Benefit)   7,256,031    4,300,843 
           
Deferred          
Federal   189,698    (2,139,124)
State   122,273    (356,365)
Total Deferred Income Tax Expense (Benefit)   311,971    (2,495,489)
Total  $7,568,002   $1,805,354 

 

The reconciliation of income tax expense at the U.S. federal statutory rates is as follows:

 

   2024   2023 
   December 31, 
   2024   2023 
Computed expense at statutory rate  $7,161,792   $3,423,086 
State tax expense (benefit), net of federal tax benefit   154,782    (115,994)
Change in valuation allowance   -    (1,506,144)
Other, net   251,428    4,406 
Income tax expense  $7,568,002   $1,805,354 

 

The Company’s overall effective tax rate for 2024 and 2023 was 22.2% and 11.1% 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. The increase in the effective tax rate when compared to the prior year is partially due to the prior period reducing the valuation allowance related to Kilpatrick Life Insurance Company to zero and no valuation allowance adjustment in the current period.

 

As of December 31, 2024, the Company had no significant unrecognized tax benefits. As of December 31, 2024, 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 2021 through 2024 are subject to examination by taxing authorities.

 

Net Operating Losses and Tax Credit Carryforwards:

 

Year of Expiration    
2025  $- 
2026   - 
2027   - 
2028   - 
2029   - 
Thereafter up through 2037   735,671 
Indefinite carryforwards   2,436,242 
   $3,171,913 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2024 and 2023