Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of income from continuing operations before income taxes

Income from continuing operations before income taxes consisted of the following (in millions):


	Year Ended December 31,
	2021		2022		2023
Domestic operations	$	77,016	$	61,307	$	73,600
Foreign operations	13,718		10,021		12,117
Total	$	90,734	$	71,328	$	85,717

Schedule of components of income tax expense (benefit)

Provision for income taxes consisted of the following (in millions):


	Year Ended December 31,
	2021		2022		2023
Current:
Federal and state	$	10,126	$	17,120	$	17,125

Foreign	2,692		2,434		2,526
Total	12,818		19,554		19,651
Deferred:
Federal and state	2,018		(8,052)		(7,482)

Foreign	(135)		(146)		(247)
Total	1,883		(8,198)		(7,729)
Provision for income taxes	$	14,701	$	11,356	$	11,922

Schedule of effective income tax rate reconciliation

The reconciliation of federal statutory income tax rate to our effective income tax rate was as follows:


	Year Ended December 31,
	2021		2022		2023
U.S. federal statutory tax rate	21.0	%	21.0	%	21.0	%
Foreign income taxed at different rates	0.2		3.0		0.3
Foreign-derived intangible income deduction	(2.5)		(5.4)		(4.6)
Stock-based compensation expense	(2.5)		(1.2)		(0.8)
Federal research credit	(1.6)		(2.2)		(1.8)
Deferred tax asset valuation allowance	0.6		0.9		0.6
State and local income taxes	1.0		0.8		1.0
Effect of tax law change	0.0		0.0		(1.4)
Other	0.0		(1.0)		(0.4)
Effective tax rate	16.2	%	15.9	%	13.9	%

Schedule of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities were as follows (in millions):


	As of December 31,
	2022		2023
Deferred tax assets:
Accrued employee benefits	$	955	$	1,855



Accruals and reserves not currently deductible	1,956		2,481

Tax credits	6,002		6,609
Net operating losses	2,557		2,965
Operating leases	2,711		3,526
Capitalized research and development(1)	10,381		17,757
Other	2,289		1,951
Total deferred tax assets	26,851		37,144
Valuation allowance	(9,553)		(10,999)
Total deferred tax assets net of valuation allowance	17,298		26,145
Deferred tax liabilities:
Property and equipment, net	(6,607)		(8,189)

Net investment gains	(2,361)		(2,405)
Operating leases	(2,491)		(2,965)
Other	(1,092)		(902)
Total deferred tax liabilities	(12,551)		(14,461)
Net deferred tax assets (liabilities)	$	4,747	$	11,684

(1)As required by the 2017 Tax Cuts and Jobs Act, effective January 1, 2022, our research and development expenditures were capitalized and amortized which resulted in substantially higher cash taxes starting in 2022 with an equal amount of deferred tax benefit.

Summary of income tax contingencies

The following table summarizes the activity related to our gross unrecognized tax benefits (in millions):


	Year Ended December 31,
	2021		2022		2023
Beginning gross unrecognized tax benefits	$	3,837	$	5,158	$	7,055
Increases related to prior year tax positions	529		253		740
Decreases related to prior year tax positions	(263)		(437)		(682)
Decreases related to settlement with tax authorities	(329)		(140)		(21)
Increases related to current year tax positions	1,384		2,221		2,346
Ending gross unrecognized tax benefits	$	5,158	$	7,055	$	9,438