INCOME TAXES

The Company files a consolidated federal income tax return and certain combined state and local income tax returns with its subsidiaries. Income taxes consist of the following:



2019	Federal			State			Total
Current income tax expense	$	424,000		$	263,000		$	687,000
Deferred income tax benefit	(145,000		)	(223,000		)	(368,000		)
Total income tax expense	$	279,000		$	40,000		$	319,000



2018	Federal		State			Total
Current income tax expense	$	589,000	$	371,000		$	960,000
Deferred income tax expense (benefit)	$	2,293,000	$	(65,000	)	$	2,228,000
Total income tax expense	$	2,882,000	$	306,000		$	3,188,000



2017	Federal		State		Total
Current income tax expense	$	1,074,000	$	439,000	$	1,513,000
Deferred income tax expense	$	2,126,000	$	412,000	$	2,538,000
Total income tax expense	$	3,200,000	$	851,000	$	4,051,000

The income tax provision related to pre-tax income (loss) vary from the federal statutory rate as follows:



	Years Ended September 30,
	2019		2018		2017
Statutory federal rate	(21.0	)%	(24.3	)%	34.0	%
State income taxes, net of federal income tax expense (benefit)	1.8	%	2.5	%	3.4	%
Permanent differences for tax purposes	9.2	%	33.1	%	(14.4	)%
Change in rate	9.7	%	28.2	%	—	%
Write-off of deferred tax asset attributable to change in ownership (see below)	67.7	%	—	%	—	%
Other	(3.6	)%	(1.2	)%	1.4	%
	63.8	%	38.3	%	24.4	%

Significant components of the Company’s net deferred tax assets in the accompanying financial statements are as follows:



	September 30,
	2019			2018
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	2,967,000		$	3,673,000
Contingent consideration	441,000			203,000
Stock based compensation	1,481,000			938,000
Accrued expenses	1,499,000			1,031,000
Accounts receivable and other receivables	91,000			149,000
Federal AMT credit carryforward	260,000			260,000
Fixed assets	(510,000		)	(186,000		)
Intangibles	(448,000		)	(361,000		)
Securities	(1,221,000		)	(1,515,000		)
Total deferred tax asset, net	$	4,560,000		$	4,192,000

At September 30, 2019, the Company had available federal net operating loss carryforwards of approximately $13.3 million, which includes approximately $4.6 million resulting from the National Tax acquisition, and state net operating loss carryforwards of approximately $8.7 million that may be applied against future taxable income and expire at various dates between 2020 and 2033.

Due to the change in ownership discussed in Note 19, the Company’s deferred tax asset relating to the Company’s net operating loss carry forwards will be subject to an annual limitation under Section 382 of the Internal Revenue Code, thereby reducing the amount of net operating loss carry forwards available to the Company to offset future taxable income. Such reduction in 2019 resulted in a write-off of deferred income tax assets of $339,000.

During the year ended September 30, 2018, the Company estimated its annual effective rate to reflect a change in the federal statutory rate from 34% to 21%, resulting from legislation enacted on December 22, 2017. The rate change is administered effective at the beginning of the Company's fiscal year, using a blended rate for the annual period of 24.3%. Additionally, the Company recognized a tax expense of approximately $2,400,000 during the year ended September 30, 2018, to adjust the Company's net deferred tax balance to reflect the new corporate tax rate. The accounting for the effects of the rate change on deferred tax balances is complete and no provisional amounts were recorded for this item.