Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

The components of income before provision for income taxes are as follows (in millions):


	Year Ended December 31,
	2023		2022		2021
Domestic	$	43,499	$	25,025	$	43,669
Foreign	3,929		3,794		3,615
Income before provision for income taxes	$	47,428	$	28,819	$	47,284

The provision for income taxes consists of the following (in millions):


	Year Ended December 31,
	2023		2022		2021
Current:
Federal	$	4,934	$	6,094	$	4,971
State	577		874		548
Foreign	2,688		1,928		1,786
Total current tax expense	8,199		8,896		7,305

Deferred:
Federal	67		(2,776)		585
State	123		(405)		43
Foreign	(59)		(96)		(19)
Total deferred tax (benefits)/expense	131		(3,277)		609
Provision for income taxes	$	8,330	$	5,619	$	7,914

A reconciliation of the U.S. federal statutory income tax rates to our effective tax rate is as follows (in percentages):


	Year Ended December 31,
	2023		2022		2021
U.S. federal statutory income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	1.1		1.0		1.0
Share-based compensation	(0.6)		2.6		(1.7)
Research and development tax credits	(1.5)		(2.4)		(1.3)
Foreign-derived intangible income deduction	(4.3)		(7.0)		(3.5)
Effect of non-U.S. operations	0.9		3.0		0.9

Other	1.0		1.3		0.3
Effective tax rate	17.6	%	19.5	%	16.7	%

Our deferred tax assets (liabilities) are as follows (in millions):


	December 31,
	2023		2022
Deferred tax assets:
Loss carryforwards	$	353	$	234
Tax credit carryforwards	2,028		1,576
Share-based compensation	459		368
Accrued expenses and other liabilities	2,168		1,627
Lease liabilities	3,752		3,200
Capitalized research and development	9,292		8,175
Unrealized losses in securities and investments	232		489
Other	487		621
Total deferred tax assets	18,771		16,290
Less: valuation allowance	(2,879)		(2,493)
Deferred tax assets, net of valuation allowance	15,892		13,797

Deferred tax liabilities:
Depreciation and amortization	(8,320)		(6,296)
Right-of-use assets	(2,708)		(2,555)
Total deferred tax liabilities	(11,028)		(8,851)
Net deferred tax assets	$	4,864	$	4,946

The following table reflects changes in the gross unrecognized tax benefits (in millions):


	Year Ended December 31,
	2023		2022		2021
Gross unrecognized tax benefits ‑ beginning of period	$	10,757	$	9,807	$	8,692
Increases related to prior year tax positions	168		210		328
Decreases related to prior year tax positions	(264)		(172)		(86)
Increases related to current year tax positions	1,204		1,166		963
Decreases related to settlements of prior year tax positions	(199)		(254)		(90)
Gross unrecognized tax benefits ‑ end of period	$	11,666	$	10,757	$	9,807