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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Components of income tax expense | The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows:
(Millions) |  | 2023 |  | 2022 |  | 2021
Current income tax expense: |  |  |  |  |  |
U.S. federal |  | $ | 2,455 |  |  | $ | 2,445 |  |  | $ | 1,656 |
U.S. state and local |  | 351 |  |  | 339 |  |  | 351 |
Non-U.S. |  | 662 |  |  | 476 |  |  | 328 |
Total current income tax expense |  | 3,468 |  |  | 3,260 |  |  | 2,335 |
Deferred income tax (benefit) expense: |  |  |  |  |  |
U.S. federal |  | (952) |  |  | (763) |  |  | 231 |
U.S. state and local |  | (139) |  |  | (117) |  |  | 22 |
Non-U.S. |  | (238) |  |  | (309) |  |  | 41 |
Total deferred income tax (benefit) expense |  | (1,329) |  |  | (1,189) |  |  | 294 |
Total income tax expense |  | $ | 2,139 |  |  | $ | 2,071 |  |  | $ | 2,629 |
Effective income tax rate reconciliation | A reconciliation of the U.S. federal statutory rate of 21 percent as of December 31, 2023, 2022 and 2021, to our actual income tax rate was as follows:
|  | 2023 |  | 2022 |  | 2021
U.S. statutory federal income tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
(Decrease) increase in taxes resulting from: |  |  |  |  |  |
Tax credits and tax-exempt income |  | (0.7) |  |  | (0.9) |  |  | (0.1) |
State and local income taxes, net of federal benefit |  | 2.4 |  |  | 3.1 |  |  | 3.0 |
Non-U.S. subsidiaries’ earnings (a) |  | (0.8) |  |  | (0.1) |  |  | 1.1 |
Tax settlements and lapse of statute of limitations |  | (2.0) |  |  | (2.1) |  |  | (0.3) |
Valuation allowances |  | 0.1 |  |  | (0.1) |  |  | — |
Other |  | 0.3 |  |  | 0.7 |  |  | (0.1) |
Actual tax rates |  | 20.3 | % |  | 21.6 | % |  | 24.6 | %
(a)In certain jurisdictions outside the United States, we benefit from agreements that temporarily lower our income tax expense. The impact of these agreements was not material to our Consolidated Statements of Income.
Components of deferred tax assets and liabilities | The significant components of deferred tax assets and liabilities as of December 31 are reflected in the following table:
(Millions) |  | 2023 |  | 2022
Deferred tax assets: |  |  |  |
Reserves not yet deducted for tax purposes |  | $ | 4,552 |  |  | $ | 4,052 |
Employee compensation and benefits |  | 335 |  |  | 353 |
Net operating loss and tax credit carryforwards |  | 466 |  |  | 411 |
Capitalized developed software |  | 743 |  |  | — |
Other |  | 723 |  |  | 776 |
Gross deferred tax assets |  | 6,819 |  |  | 5,592 |
Valuation allowance |  | (614) |  |  | (537) |
Deferred tax assets after valuation allowance |  | 6,205 |  |  | 5,055 |
Deferred tax liabilities: |  |  |  |
Intangibles and fixed assets |  | 683 |  |  | 671 |
Deferred revenue |  | 62 |  |  | 126 |
Deferred interest |  | 114 |  |  | 118 |
Investment in joint ventures |  | — |  |  | 17 |
Other |  | 566 |  |  | 618 |
Gross deferred tax liabilities |  | 1,425 |  |  | 1,550 |
Net deferred tax assets |  | $ | 4,780 |  |  | $ | 3,505 |
Changes in unrecognized tax benefits | The following table presents changes in unrecognized tax benefits:
(Millions) |  | 2023 |  | 2022 |  | 2021
Balance, January 1 |  | $ | 962 |  |  | $ | 1,024 |  |  | $ | 790 |
Increases: |  |  |  |  |  |
Current year tax positions |  | 132 |  |  | 119 |  |  | 64 |
Tax positions related to prior years |  | 40 |  |  | 30 |  |  | 225 |
Decreases: |  |  |  |  |  |
Tax positions related to prior years |  | (50) |  |  | (30) |  |  | (14) |
Settlements with tax authorities |  | (160) |  |  | (74) |  |  | (15) |
Lapse of statute of limitations |  | (49) |  |  | (104) |  |  | (17) |
Effects of foreign currency translations |  | — |  |  | (3) |  |  | (9) |
Balance, December 31 |  | $ | 875 |  |  | $ | 962 |  |  | $ | 1,024 |

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