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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Taxes [Abstract] |
Income Taxes | 11. Income Taxes Income tax expense for the three years ended December 31, 2022, 2021, and 2020 differs from the U.S. federal statutory rate primarily due to the taxation treatment of income attributable to noncontrolling interests in IBG LLC. These noncontrolling interests are held directly through a U.S. partnership. Accordingly, the income attributable to these noncontrolling interests is reported in the consolidated statements of comprehensive income, but the related U.S. income tax expense attributable to these noncontrolling interests is not reported by the Company as it is generally the obligation of the noncontrolling interests. Income tax expense is also affected by the differing effective tax rates in foreign, state and local jurisdictions where certain of the Company’s subsidiaries are subject to corporate taxation. Deferred income taxes arise primarily due to the amortization of the deferred tax assets recognized in connection with the common stock offerings (see Note 4), differences in the valuation of financial assets and liabilities, and for other temporary differences arising from the deductibility of compensation and depreciation expenses in different periods for accounting and income tax return purposes. Under U.S. GAAP, the Company is allowed to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to global intangible low tax income as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has elected the period cost method. ‎ The table below presents the components of the provision for income taxes for the periods indicated.
|  | Year-Ended December 31, |
|  | 2022 |  | 2021 |  | 2020 |
|  | (in millions) |
Current |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 59 |  | $ | 62 |  | $ | 21 |
State and local |  |  | 8 |  |  | 8 |  |  | 4 |
Foreign |  |  | 69 |  |  | 58 |  |  | 43 |
Total current |  |  | 136 |  |  | 128 |  |  | 68 |
Deferred |  |  |  |  |  |  |  |  |  |
Federal |  |  | 21 |  |  | 15 |  |  | 21 |
State and local |  |  | 4 |  |  | 4 |  |  | (7) |
Foreign |  |  | (5) |  |  | 4 |  |  | (5) |
Total deferred |  |  | 20 |  |  | 23 |  |  | 9 |
|  | $ | 156 |  | $ | 151 |  | $ | 77 |
The table below presents a reconciliation of the statutory U.S. Federal income tax rate of 21% to the Company’s effective tax rate for the periods indicated.
|  | Year-Ended December 31,
|  | 2022 |  | 2021 |  | 2020
U.S. Statutory Tax Rate |  |  | 21.0% |  |  | 21.0% |  |  | 21.0%
State, local and foreign taxes, net of federal benefit |  |  | 2.1% |  |  | 3.0% |  |  | 1.5%
Subtotal |  |  | 23.1% |  |  | 24.0% |  |  | 22.5%
Less: rate attributable to noncontrolling interests |  |  | (15.3%) |  |  | (15.6%) |  |  | (16.4%)
Total |  |  | 7.8% |  |  | 8.4% |  |  | 6.1%
The table below presents significant components of the Company’s deferred tax assets and liabilities, which are reported in other assets and in accounts payable, accrued expenses and other liabilities, respectively, in the consolidated statements of financial condition for the periods indicated.
|  | December 31,
|  | 2022 |  | 2021 |  | 2020
|  | (in millions)
Deferred tax assets |  |  |  |  |  |  |  |  |
Arising from the acquisition of interests in IBG LLC |  | $ | 193 |  | $ | 209 |  | $ | 190
Deferred compensation |  |  | 14 |  |  | 11 |  |  | 9
Other |  |  | 34 |  |  | 22 |  |  | 16
Total deferred tax assets |  |  | 241 |  |  | 242 |  |  | 215
Deferred tax liabilities |  |  |  |  |  |  |  |  |
Foreign |  |  | 2 |  |  | 1 |  |  | 2
Other |  |  | 7 |  |  | 11 |  |  | 8
Total deferred tax liabilities |  |  | 9 |  |  | 12 |  |  | 10
Net deferred tax assets |  | $ | 232 |  | $ | 230 |  | $ | 205
As of and for the years ended December 31, 2022 and 2021, the Company had no material valuation allowances on deferred tax assets. The Company is subject to taxation in the U.S. and various states and foreign jurisdictions. As of December 31, 2022, the Company is no longer subject to U.S. Federal and State income tax examinations for tax years before 2016, and to non-U.S. income tax examinations for tax years prior to 2012. ‎ As of December 31, 2022, accumulated earnings held by non-U.S. subsidiaries totaled $1.9 billion (as of December 31, 2021 $1.6 billion), of which $1.8 billion of such earnings are indefinitely reinvested abroad due to regulatory and other capital requirements in foreign jurisdictions. As a result, the Company has not provided for its proportionate share of additional foreign taxes or deferred U.S. tax on Internal Revenue Code (“IRC”) Section 986 gains/losses on previously taxed earnings and any local foreign withholding taxes associated with the repatriation of such earnings. If the Company were to record a deferred tax liability due to a hypothetical repatriation of such earnings, the estimated amount of such taxes would be up to $11 million of foreign withholding taxes as of December 31, 2022. Under U.S. GAAP, a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Based upon the Company’s review of its federal, state, local and foreign income tax returns and tax filing positions, the Company has recorded a $2 million tax liability for an uncertain tax position for an IRS audit primarily related to the IRC Section 199 Domestic Production Activities Deduction.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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