Here is a status update no one will “like” – one of America’s largest companies avoided paying federal or state income taxes, and is poised to do so again this year. In fact, they will likely receive a check from the federal government in the form of a tax refund. Despite bringing in more than $1 billion in U.S. pretax profits last year, the social-media giant Facebook reported a combined $429 million refund from their federal and state tax filings. Uncle Sam cut a check to Facebook for roughly $295 million in 2012, according to one analysis of the company’s 10-K filing. Facebook’s first annual 10-K report filed with the Securities and Exchange Commission for 2012 details the company’s use of the employee stock option tax deduction, which lowered the company’s income taxes owed to federal and state authorities by $1.03 billion last year.
By providing stock options as a major form of their compensation, to date, Facebook has claimed $3.2 billion in federal and state stock option deductions, $1.03 billion of which was used to offset their total U.S. pretax profit of $1.1 billion in 2012, and $429 million was refunded from its 2010 and 2011 tax bills. The remaining $2.17 billion in stock option tax deductions can now be carried forward by the company and used to offset future tax liabilities. This rollover, in addition to currently outstanding employee stock options, may once again make this year’s tax bill disappear. If Facebook has the same U.S. pretax profit in 2013 as last year ($1.1 billion), the company will be able to zero out their tax bill for the next year. Taxpayers gave Facebook a gift card worth an estimated $295 million in 2012, and Uncle Sam will likely cut the billion-dollar company another big check in 2013.
Information found for this “Your Tax Dollars @ Work” post was done by using a Google search. Information compiled from multiple public websites & media outlets.
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