Can someone explain how this "0 fed taxes" thing?

[SuiteLiving]

The 10-K does provide a decent disclosure of what their federal income tax position is while not specifically stating how much they may have paid to a particular taxing authority. 2018 current federal taxes for Amazon was $(129). It looks like this is likely the reversal of some of the estimates they booked when the TCJA was passed in 2017. It's likely that they did not make any cash payments to the IRS for the 2018 tax year.

[RationalExpectations]

Originally Posted by SuiteLiving

The 10-K does provide a decent disclosure of what their federal income tax position is while not specifically stating how much they may have paid to a particular taxing authority. 2018 current federal taxes for Amazon was $(129). It looks like this is likely the reversal of some of the estimates they booked when the TCJA was passed in 2017. It's likely that they did not make any cash payments to the IRS for the 2018 tax year.

The financial statements report a provision for income tax based on GAAP, don't they?

The IRS Tax Return is not calculated with input from the financial statements, nor does the tax return provide input to the financial statements, right?

[SuiteLiving]

Originally Posted by RationalExpectations

The financial statements report a provision for income tax based on GAAP, don't they?

The IRS Tax Return is not calculated with input from the financial statements, nor does the tax return provide input to the financial statements, right?

The provision is based on GAAP, correct. But the provision is made of multiple components. Federal, state and foreign current and deferred.

The current provisions lay out essentially what's in the tax returns for the year. They will include a provision for uncertain tax positions that won't go on the tax returns, as well as settlements of prior year uncertain positions or the expiration of the statute of limitations where prior accruals can be released. Overall though, it gives a pretty good feeling for what the tax returns should look like.

The deferred provisions shows the taxable and deductible temporary differences that will reverse in the future. Those won't tell you much about the tax return for the prior year.

[High Altitude]

If they have any profits and aren't paying fed taxes they have credits, like for R&D, or are offsetting profits with past losses carry forward.

We allow these credits or the carry forward of past losses because it encourages businesses to take risk, take losses, invest in the future etc knowing that when they do have profits eventually they will be able to use these past losses or expenses to offset these future profits/taxes.

It's a good thing.

The real issue is really about how much for how long, what we allow etc...