Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Components of Provision for Income Taxes, Net

The components of the provision (benefit) for income taxes, net are as follows (in millions):

	Year Ended December 31,
	2021		2022		2023
U.S. Federal:
Current	$	2,129	$	2,175	$	8,652
Deferred	155		(6,686)		(5,505)
Total	2,284		(4,511)		3,147
U.S. State:
Current	763		1,074		2,158
Deferred	(178)		(1,302)		(498)
Total	585		(228)		1,660
International:
Current	2,209		1,682		2,186
Deferred	(287)		(160)		127
Total	1,922		1,522		2,313
Provision (benefit) for income taxes, net	$	4,791	$	(3,217)	$	7,120

Components of Income Before Income Taxes, Domestic and Foreign

U.S. and international components of income (loss) before income taxes are as follows (in millions):

	Year Ended December 31,
	2021		2022		2023
U.S.	$	35,879	$	(8,225)	$	32,328
International	2,272		2,289		5,229
Income (loss) before income taxes	$	38,151	$	(5,936)	$	37,557

Effective Income Tax Rate Reconciliation

The items accounting for differences between income taxes computed at the federal statutory rate and the provision (benefit) recorded for income taxes are as follows (in millions):

	Year Ended December 31,
	2021		2022		2023
Income taxes computed at the federal statutory rate	$	8,012	$	(1,246)	$	7,887
Effect of:
Tax impact of foreign earnings and losses	(1,349)		(370)		594
State taxes, net of federal benefits	465		(173)		1,307
Tax credits	(1,136)		(1,006)		(2,362)
Stock-based compensation (1)	(1,094)		612		1,047
Foreign income deduction (2)	(301)		(1,258)		(1,429)
Other, net	194		224		76
Total	$	4,791	$	(3,217)	$	7,120

___________________

(1)Includes non-deductible stock-based compensation and excess tax benefits or shortfalls from stock-based compensation. Our tax provision includes $1.9 billion of excess tax benefits from stock-based compensation for 2021, and $33 million and $519 million of tax shortfalls from stock-based compensation for 2022 and 2023.

(2)U.S. companies are eligible for a deduction that lowers the effective tax rate on certain foreign income. This regime is referred to as the Foreign-Derived Intangible Income deduction and is dependent on the amount of our U.S. taxable income.

Deferred Tax Assets and Liabilities

Deferred income tax assets and liabilities are as follows (in millions):

	December 31,
	2022		2023
Deferred tax assets (1):
Loss carryforwards U.S. - Federal/States	386		610
Loss carryforwards - Foreign	2,831		2,796
Accrued liabilities, reserves, and other expenses	3,280		3,751
Stock-based compensation	4,295		5,279
Depreciation and amortization	1,009		1,114
Operating lease liabilities	18,285		19,922
Capitalized research and development	6,824		14,800
Other items	1,023		745
Tax credits	950		1,582
Total gross deferred tax assets	38,883		50,599
Less valuation allowances (2)	(4,374)		(4,811)
Deferred tax assets, net of valuation allowances	34,509		45,788
Deferred tax liabilities:
Depreciation and amortization	(9,039)		(12,454)
Operating lease assets	(17,140)		(18,648)
Other items	(817)		(1,489)
Net deferred tax assets (liabilities), net of valuation allowances	$	7,513	$	13,197

 ___________________

(1)Deferred tax assets are presented after tax effects and net of tax contingencies.

(2)Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions or future capital gains, as well as tax credits.

Reconciliation of Income Tax Contingencies

The reconciliation of our income tax contingencies is as follows (in millions):

	December 31,
	2021		2022		2023
Gross tax contingencies – January 1	$	2,820	$	3,242	$	4,002
Gross increases to tax positions in prior periods	403		274		440
Gross decreases to tax positions in prior periods	(354)		(172)		(38)
Gross increases to current period tax positions	507		706		1,009
Settlements with tax authorities	(60)		(20)		(106)
Lapse of statute of limitations	(74)		(28)		(79)
Gross tax contingencies – December 31 (1)	$	3,242	$	4,002	$	5,228

 ___________________

(1)As of December 31, 2023, we had approximately $5.2 billion of income tax contingencies of which $3.3 billion, if fully recognized, would decrease our effective tax rate.