Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

The components of income tax expense for 2020, 2019 and 2018, are as follows:

(in millions)	2020			2019			2018
Current income tax expense:
Federal	$	720		$	735		$	605
State and local		86			109			97
Foreign		589			400			600
Total net current income tax expense		1,395			1,244			1,302
Deferred income tax expense (benefit):
Federal		(66	)		15			(71	)
State and local		6			7			(1	)
Foreign		(97	)		(5	)		(154	)
Total net deferred income tax expense (benefit)		(157	)		17			(226	)
Total income tax expense	$	1,238		$	1,261		$	1,076

Components of Income before Taxes, Less Net Income (Loss) Attributable to Noncontrolling Interests

Income tax expense has been based on the following components of income before taxes, less net income (loss) attributable to NCI:

(in millions)	2020		2019		2018
Domestic	$	3,805	$	3,766	$	3,536
Foreign		2,365		1,971		1,845
Total	$	6,170	$	5,737	$	5,381

Reconciliation of Income Tax Expense with Expected Federal Income Tax Expense

A reconciliation of income tax expense with expected federal income tax expense computed at the applicable federal income tax rate of 21% for 2020, 2019 and 2018 is as follows:

(in millions)	2020					2019					2018
Statutory income tax expense	$	1,296		21	%	$	1,205		21	%	$	1,130		21	%
Increase (decrease) in income taxes resulting from:
State and local taxes (net of federal benefit)		81		1			96		2			99		2
Impact of federal, foreign, state, and local tax rate changes on deferred taxes		78		1			5		—			—		—
Stock-based compensation awards		(36	)	—			(23	)	—			(64	)	(1	)
Charitable Contribution		(128	)	(2	)		—		—			—		—
Effect of foreign tax rates		(100	)	(2	)		(76	)	(1	)		(119	)	(2	)
Other		47		1			54		—			30		—
Income tax expense	$	1,238		20	%	$	1,261		22	%	$	1,076		20	%

Components of Deferred Income Tax Assets and Liabilities

The components of deferred income tax assets and liabilities are shown below:

	December 31,
(in millions)	2020			2019
Deferred income tax assets:
Compensation and benefits	$	295		$	282
Unrealized investment losses		20			—
Loss carryforwards		80			84
Other		659			481
Gross deferred tax assets		1,054			847
Less: deferred tax valuation allowances		(26	)		(51	)
Deferred tax assets net of valuation allowances		1,028			796
Deferred income tax liabilities:
Goodwill and acquired indefinite-lived intangibles		4,096			3,971
Acquired finite-lived intangibles		159			179
Unrealized investment gains		—			63
Other		142			142
Gross deferred tax liabilities		4,397			4,355
Net deferred tax (liabilities)	$	(3,369	)	$	(3,559	)

Reconciliation of Gross Unrecognized Tax Benefits

The following tabular reconciliation presents the total amounts of gross unrecognized tax benefits:

(in millions)	2020			2019			2018
Balance at January 1	$	900		$	795		$	629
Additions for tax positions of prior years		31			99			82
Reductions for tax positions of prior years		(8	)		(27	)		(15	)
Additions based on tax positions related to current year		60			47			102
Lapse of statute of limitations		(3	)		(4	)		(3	)
Settlements		(40	)		(10	)		—
Balance at December 31	$	940		$	900		$	795