Microsoft Reports a 2.44 Percent Federal Tax Rate on a Record $101 Billion in Profits

Microsoft’s $101 billion of pretax U.S. income dwarfs its previous all-time high of $65 billion, recorded the previous year. And instead of paying $21 billion of current federal income tax, as the 21 percent statutory federal income tax rate should require, Microsoft reports just $2.46 billion of current federal tax. That’s an effective federal income tax rate of 2.44 percent. Fully two-thirds of the company’s tax breaks last year are due to one provision, accelerated depreciation. The other one-third of Microsoft’s 2025 tax breaks are due to a mix of new and old tax provisions.