Why deferred taxes appear in OCF
Book tax expense (on the income statement) and cash tax payments diverge. Deferred tax assets and liabilities accumulate on the balance sheet; the period change is non-cash and shows up in the OCF reconciliation.
Bonus depreciation wedge
Under MACRS bonus rules, a firm can claim accelerated depreciation for tax purposes while reporting straight-line for book. The result is lower cash tax in the early years, higher cash tax later, and a deferred-tax-liability build that bleeds off over the asset's life.
Use cash taxes for FCFF
FCFF's EBIT × (1 - t) term begs the question: which t? The theoretically clean answer is the cash effective rate, derived from cash taxes paid divided by pre-tax book income. The 10-K income-tax footnote discloses both the book and cash figures, often in a single supplementary table.
Where to find cash taxes paid
Cash flow statement, supplementary disclosures at the bottom: "Cash paid for income taxes" (or similar). Most filers disclose this even when the table is compressed.