wandering stars

Facebook anticipates its deduction will be so large that it will wipe out the company’s tax obligations for all of 2011, according to the firm’s regulatory filing for its initial public offering. The company also expects to get as much as $500 million in refunds applied to the taxes it paid over the last two years.

All of this is legal. Under current law, companies can take a deduction when employees cash in stock options. The thinking is that compensating employees with stock options is an expense for companies that the government wants to offset.