Entity information:
Income Taxes
The Company’s provision for income taxes was as follows (in thousands):
 
December 31,
 
2017
 
2016
 
2015
Current provision:
 
 
 
 
 
Federal
$
117,745

 
$
102,133

 
$
123,633

State
17,353

 
15,002

 
20,291

Total current provision
135,098

 
117,135

 
143,924

Deferred benefit:
 
 
 
 
 
Federal
(8,951
)
 
(10,767
)
 
(24,972
)
State
(440
)
 
(783
)
 
(5,181
)
Total deferred benefit
(9,391
)
 
(11,550
)
 
(30,153
)
Provision for income taxes
$
125,707

 
$
105,585

 
$
113,771


A reconciliation of the United States federal statutory income tax rates to the Company’s effective income tax rates is set forth below:
 
Years Ended December 31,
 
2017
 
2016
 
2015
Federal statutory income tax rates
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal benefit
3.0

 
3.5

 
3.6

Non-deductible expenses
0.6

 
0.3

 
0.7

Share-based compensation
(0.9
)
 
0.1

 
—

Tax Cuts and Jobs Act of 2017
(2.4
)
 
—

 
—

Domestic production activities deduction
(0.9
)
 
(2.2
)
 
—

Research & development credits
(0.4
)
 
(1.1
)
 
—

Other
0.5

 
(0.1
)
 
1.0

Effective income tax rates
34.5
 %
 
35.5
 %
 
40.3
 %

The decrease in the Company's effective income tax rate and income tax expense in 2017 compared to 2016 was primarily due to tax benefits associated with the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, on January 1, 2017, and the revaluation of its deferred tax assets and liabilities under the Tax Cuts and Jobs Act 2017, partially offset by tax benefits recorded during 2016 associated with internally developed software that was not repeated in 2017.
The decrease in the Company's effective income tax rate and income tax expense in 2016 compared to 2015 was primarily due to tax benefits associated with internally developed software that we determined in 2016.
The components of the net deferred income taxes included in the consolidated statements of financial condition were as follows (in thousands):
 
December 31,
 
2017
 
2016
Deferred tax assets:
 
 
 
Accrued liabilities
$
59,422

 
$
75,907

Share-based compensation
17,122

 
31,715

State taxes
5,630

 
9,345

Deferred rent
32,457

 
49,544

Provision for bad debts
2,956

 
7,520

Net operating losses
—

 
(10
)
Forgivable loans
7,643

 
9,381

Captive insurance
1,355

 
1,689

Other
—

 
956

Total deferred tax assets
126,585

 
186,047

Deferred tax liabilities:
 
 
 
Amortization of intangible assets
(75,043
)
 
(122,482
)
Depreciation of fixed assets
(63,213
)
 
(88,960
)
Other
(4,333
)
 
(219
)
Total deferred tax liabilities
(142,589
)
 
(211,661
)
Deferred income taxes, net
$
(16,004
)
 
$
(25,614
)

The following table reflects a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits, including interest and penalties (in thousands):
 
December 31,
 
2017
 
2016
 
2015
Balance — Beginning of year
$
39,766

 
$
24,747

 
$
20,987

Increases for tax positions taken during the current year
7,815

 
17,787

 
4,404

Reductions as a result of a lapse of the applicable statute of limitations
(4,924
)
 
(2,768
)
 
(644
)
Balance — End of year
$
42,657

 
$
39,766

 
$
24,747


At December 31, 2017 and 2016, there were $37.6 million and $31.4 million, respectively, of unrecognized tax benefits that if recognized, would favorably affect the effective income tax rate in any future periods.
The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes within the consolidated statements of financial condition. At December 31, 2017 and 2016, the liability for unrecognized tax benefits included accrued interest of $4.5 million and $3.9 million, respectively, and penalties of $4.4 million and $4.5 million, respectively.
The Company and its subsidiaries file income tax returns in the federal jurisdiction, as well as most state jurisdictions, and are subject to routine examinations by the respective taxing authorities. The Company has concluded all federal income tax matters for years through 2011 and all state income tax matters for years through 2006.
The tax years of 2012 to 2016 remain open to examination in the federal jurisdiction. The tax years of 2007 to 2016 remain open to examination in the state jurisdictions. In the next 12 months, it is reasonably possible that the Company expects a reduction in unrecognized tax benefits of $2.7 million primarily related to the statute of limitations expiration in various state jurisdictions.