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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Reconciliation of the applicable statutory U.S. income tax rate to the effective tax rate the effective tax rate

A reconciliation of the applicable statutory U.S. income tax rate to the effective tax rate for each of the years ended December 31, 2014, 2013 and 2012, is presented in the following table.



Effective tax rate
Year ended December 31,	2014		2013		2012
Statutory U.S. federal tax rate	35.0	%	35.0	%	35.0	%
Increase/(decrease) in tax rate resulting from:
U.S. state and local income taxes, net of U.S. federal income tax benefit	2.7		2.2		1.6
Tax-exempt income	(3.1	)	(3.1	)	(2.9	)
Non-U.S. subsidiary earnings^(a)	(2.0	)	(4.9	)	(2.4	)
Business tax credits	(5.4	)	(5.4	)	(4.2	)
Nondeductible legal expense	2.4		8.0		(0.2	)
Other, net	(2.6	)	(1.0	)	(0.5	)
Effective tax rate	27.0	%	30.8	%	26.4	%


(a)	Predominantly includes earnings of U.K. subsidiaries that are deemed to be reinvested indefinitely.

Components of income tax expense/(benefit) included in the Consolidated Statements of Income

The components of income tax expense/(benefit) included in the Consolidated statements of income were as follows for each of the years ended December 31, 2014, 2013, and 2012.



Income tax expense/(benefit)
Year ended December 31, (in millions)	2014		2013			2012
Current income tax expense/(benefit)
U.S. federal	$	1,610	$	(1,316	)	$	3,225
Non-U.S.	1,353		1,308			1,782
U.S. state and local	857		(4		)	1,496
Total current income tax expense/(benefit)	3,820		(12		)	6,503
Deferred income tax expense/(benefit)
U.S. federal	3,738		7,080			2,238
Non-U.S.	71		10			(327		)
U.S. state and local	401		913			(781		)
Total deferred income tax expense/(benefit)	4,210		8,003			1,130
Total income tax expense	$	8,030	$	7,991		$	7,633

Significant components of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities are reflected in the following table as of December 31, 2014 and 2013.



Deferred taxes
December 31, (in millions)	2014			2013
Deferred tax assets
Allowance for loan losses	$	5,756		$	6,593
Employee benefits	3,378			4,468
Accrued expenses and other	8,637			9,179
Non-U.S. operations	5,106			5,493
Tax attribute carryforwards	570			748
Gross deferred tax assets	23,447			26,481
Valuation allowance	(820		)	(724		)
Deferred tax assets, net of valuation allowance	$	22,627		$	25,757
Deferred tax liabilities
Depreciation and amortization	$	3,073		$	3,196
Mortgage servicing rights, net of hedges	5,533			5,882
Leasing transactions	2,495			2,352
Non-U.S. operations	4,444			4,705
Other, net	4,891			3,459
Gross deferred tax liabilities	20,436			19,594
Net deferred tax assets	$	2,191		$	6,163

Tax examination status

The following table summarizes the status of significant income tax examinations of JPMorgan Chase and its consolidated subsidiaries as of December 31, 2014.



Tax examination status
December 31, 2014	Periods under examination	Status
JPMorgan Chase – U.S.	2003 - 2005	Field examination completed; at Appellate level
JPMorgan Chase – U.S.	2006 - 2010	Field examination
JPMorgan Chase – U.K.	2006 – 2012	Field examination of certain select entities
JPMorgan Chase – New York State and City	2005 – 2007	Field examination
JPMorgan Chase – California	2006 – 2010	Field examination

Reconciliation of the beginning and ending amount of unrecognized tax benefits

The following table presents a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2014, 2013 and 2012.



Unrecognized tax benefits
Year ended December 31, (in millions)	2014			2013			2012
Balance at January 1,	$	5,535		$	7,158		$	7,189
Increases based on tax positions related to the current period	810			542			680
Increases based on tax positions related to prior periods	477			88			234
Decreases based on tax positions related to prior periods	(1,902		)	(2,200		)	(853		)
Decreases related to settlements with taxing authorities	(9		)	(53		)	(50		)
Decreases related to a lapse of applicable statute of limitations	—			—			(42		)
Balance at December 31,	$	4,911		$	5,535		$	7,158

U.S. and non-U.S. components of income before income tax expense/(benefit) and extraordinary gain income

The following table presents the U.S. and non-U.S. components of income before income tax expense for the years ended December 31, 2014, 2013 and 2012.



Income before income tax expense - U.S. and non-U.S.
Year ended December 31, (in millions)	2014		2013		2012
U.S.	$	22,515	$	17,229	$	24,895
Non-U.S.^(a)	7,277		8,685		4,022
Income before income tax expense	$	29,792	$	25,914	$	28,917


(a)	For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S.

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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