Income Taxes (Tables)

12 Months Ended

Sep. 28, 2019

Income Tax Disclosure [Abstract]

Provision for Income Taxes

The provision for income taxes for 2019, 2018 and 2017, consisted of the following (in millions):

	2019			2018			2017
Federal:
Current	$	6,384		$	41,425		$	7,842
Deferred	(2,939		)	(33,819		)	5,980
Total	3,445			7,606			13,822
State:
Current	475			551			259
Deferred	(67		)	48			2
Total	408			599			261
Foreign:
Current	3,962			3,986			1,671
Deferred	2,666			1,181			(16		)
Total	6,628			5,167			1,655
Provision for income taxes	$	10,481		$	13,372		$	15,738

Reconciliation of Provision for Income Taxes

A reconciliation of the provision for income taxes, with the amount computed by applying the statutory federal income tax rate (21% in 2019; 24.5% in 2018; 35% in 2017) to income before provision for income taxes for 2019, 2018 and 2017, is as follows (dollars in millions):

	2019			2018			2017
Computed expected tax	$	13,805		$	17,890		$	22,431
State taxes, net of federal effect	423			271			185
Impacts of the Act	—			1,515			—
Earnings of foreign subsidiaries	(2,625		)	(5,606		)	(6,135		)
Research and development credit, net	(548		)	(560		)	(678		)
Excess tax benefits from equity awards	(639		)	(675		)	—
Other	65			537			(65		)
Provision for income taxes	$	10,481		$	13,372		$	15,738
Effective tax rate	15.9		%	18.3		%	24.6		%

Significant Components of Deferred Tax Assets and Liabilities

As of September 28, 2019 and September 29, 2018, the significant components of the Company’s deferred tax assets and liabilities were (in millions):

	2019		2018
Deferred tax assets:
Amortization and depreciation	$	11,433	$	137
Accrued liabilities and other reserves	5,389		3,151
Deferred revenue	1,372		1,141
Share-based compensation	749		513
Unrealized losses	—		871
Other	697		797
Total deferred tax assets, net	19,640		6,610
Deferred tax liabilities:
Minimum tax on foreign earnings	10,809		—
Earnings of foreign subsidiaries	330		275
Other	456		501
Total deferred tax liabilities	11,595		776
Net deferred tax assets/(liabilities)	$	8,045	$	5,834

Aggregate Changes in Gross Unrecognized Tax Benefits, Excluding Interest and Penalties

The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, for 2019, 2018 and 2017, is as follows (in millions):

	2019			2018			2017
Beginning balances	$	9,694		$	8,407		$	7,724
Increases related to tax positions taken during a prior year	5,845			2,431			333
Decreases related to tax positions taken during a prior year	(686		)	(2,212		)	(952		)
Increases related to tax positions taken during the current year	1,697			1,824			1,880
Decreases related to settlements with taxing authorities	(852		)	(756		)	(539		)
Decreases related to expiration of the statute of limitations	(79		)	—			(39		)
Ending balances	$	15,619		$	9,694		$	8,407