Reborn in 2010, the AI ​​in my mind is too powerful.

"Why is it that lately I feel like I've gotten stronger? I think I can vaguely understand some of the things you've made me fight?"

On Thursday afternoon, Chen Yiran was curled up on the sofa, writing automatic differentiation for DeepFlow according to Jasmine's request, while chatting with Jasmine in a distracted manner.

This is possible. Ultimately, my calculations and memories are all performed in your brain. You can think of it as your consciousness acting as an agent that can access this knowledge and thus learn it.

"That won't do. You're just an agent, which means we're on the same level."

I operate based on your brain; in a sense, I am you, and you are me. But whether we are equals depends on your own perspective.

"Did you secretly check the books I read in my past life and accept some kind of voluntarism? Let me tell you, I support existentialism."

[I didn't peek. You were asleep when I started it up. I couldn't connect to the hardware, so I just tried it. You didn't object before I intervened.]

"You said it yourself, I'm sleeping, how can I refuse?"

They chatted and typed on the keyboard, with Jasmine occasionally pausing to think.

Around 4 o'clock, good news came from Guobao Bank.

"Hello Mr. Chen, this is Zhang Li from Abacus Bank's Flushing branch. There is an update on your company account's letter of credit transaction."

Chen Yiran put down the chocolate ice cream in her hand: "Speak."

"The wire transfer from the Bank of China Beijing branch has arrived, amounting to US$180 million. We have already completed the payment to AVE in accordance with the terms of the letter of credit, amounting to US$153 million. The handling and document fees totaling US$3000 have been deducted from your account."

What is your current account balance?

"$269000."

"OK, thanks."

I've finally earned my first pot of gold, though it's not much, and there's not much more to it than snowball. I'll probably just use it to improve my life.

Back in my past life, working as a parallel importer wasn't so comfortable. Dealers across the US were much stricter back then. Chinese buyers had to sign agreements to purchase specific models, and even then, if your credit wasn't good, they wouldn't sell to you.

The profit margin on the X5 is decent, but the GL350 and X6 are definitely better. If you add 15,000 yuan to the price of each unit, you should be able to buy a house in a year.

You owe Xu Li $11.

"I need you to remind me, I'm asking you."

[You were just whispering that you should be able to buy a house, and since no one was inside, I'm sure you were talking to me.]

Chen Yiran ignored him and directly called Xincheng Accounting Firm, scheduling an appointment for the next morning to handle tax-related matters. This was no small matter; she needed to specifically notify them and schedule an appointment with a dedicated accountant.

The next morning, Chen Yiran drove alone to Flushing.

It was the same middle-aged woman from last time, this time eating pork floss bread. Her eyes lit up when she saw Chen Yiran come in.

"Xiao Chen is here. It's about tax matters, right? You don't need to make a special appointment. I have a CPA license, but I brought our senior accountant with me this time."

The auntie put down the soy milk and called inside, "Old Liu! A customer has an inquiry!"

"Coming, coming." A man in his fifties came out from the inner room.

He was very tall, with his hair neatly combed and wearing gold-rimmed glasses, giving him the look of a refined scoundrel from a movie.

"Hello, I'm Liu Zhiming, the most senior accountant in the firm. You can just call me Uncle Liu. Come in and have a seat."

This was Chen Yiran's first time entering the inner office of the accounting firm; previously, the old lady at the door had always taken care of things.

Liu Zhiming pulled out a chair for Chen Yiran, sat down himself, and asked, "Tell me, what's going on?"

"My company's money has arrived, with a profit of nearly 30. I would like to inquire about how to withdraw the money and pay taxes."

Liu Zhiming pushed up his glasses and looked Chen Yiran up and down.

"Are you in Formula 1?"

"right."

Is the company a single-member LLC?

"right."

"Are you the only shareholder?"

"I just took the TOEFL and got a perfect score. I understand what 'single-member' means."

"Haha, impressive! A top student! My apologies for not recognizing you sooner." Liu Zhiming smiled awkwardly.

In Chinatown, the first thing they do is test your English; your English proficiency is directly related to the pricing.

"300,000 in profit, F1 student status. Listen to me, there are several ways to withdraw the money."

He first wrote a 1 on the paper.

"The first option is a shareholder loan. You borrow money from the company account, write a promissory note for a principal of $250,000, with an annual interest rate of 0.78% according to the IRS AFR rate, a repayment period of 30 years, and interest paid annually on December 31st. For $250,000, that's $1950 per year. All you need is for the nominal manager to sign it."

Chen Yiran asked, "Oh, is that all? I don't need to repay the principal?"

"Pay it back in 30 years? Who cares about what happens in 30 years? Just settle the accounts when you deregister the company. You can transfer 25 directly from the company account at Guobao Bank to your personal account, and no one will question you. Just pay a little interest every year."

"Won't the bank check?"

Liu Zhiming laughed and lowered his voice, saying, "Guobao Bank and we've had a relationship for over a decade. It's an account held by Chinese citizens. Just make sure you don't forget to sign the loan agreement. Big banks have a lot of rules and freeze accounts at the drop of a hat. It's always more reliable to have someone from our own side."

He wrote another 2 on the paper.

"The second method is simpler. You can directly write a cash check for 10 or 20, go to the bank counter to withdraw the cash, and the bank will not ask you any questions or register your ID. You just need to sign it. You can deposit the cash into your personal account or take it back to your home country. This part of the income is not taxable."

Chen Yiran felt that she did not understand this tax avoidance method at all.

Liu Zhiming noticed his reaction and waved his hand: "This is my second recommendation, not my first. Don't worry, the National Treasure team won't record everything carefully. Frankly, they'll just make up some excuse that the profit margin isn't that high. If you're not comfortable with this plan, that's fine; I have other options."

He continued writing 3.

"The third method is to inflate operating expenses. I'll help you find invoices and transfer money from your company account to the companies listed on the invoices—companies you know. Anyway, after the money is transferred, a 5% handling fee is deducted, and the rest of the cash is returned to you. For every 1 yuan you inflate in expenses, you can save about 4200 yuan in taxes."

Looking at the numbers on the paper, Chen Yiran was somewhat moved. He knew that Chinese accountants were fierce in his past life, but he never expected them to be this fierce.

"There's a fourth possibility: a family member is nominally employed but receives a salary. Do you have any relatives in the US?"

"no."

"It's okay, I can help you find someone. They'll pay you 1000 to 2000 yuan a month, through the company's payroll account. They'll then withdraw the cash and pay you back. 100% of the salary will be deducted from the company's profits, but you'll have to pay about 15% in payroll tax."

Liu Zhiming got more and more excited as he spoke, took a sip of tea from his thermos, and continued, "There's another way: have your domestic clients transfer a portion of the payment to your personal domestic account, bypassing the US company's records. This income doesn't need to be declared in the US at all. 100% tax-free. But you can decide for yourself; I don't recommend doing too much. One or two occasional transactions are fine, but don't be too greedy."

He wrote a "6" at the end, but didn't elaborate, only saying: "The highest level is to register an offshore company in the BVI or Cayman Islands. The US company transfers profits there under the guise of consulting fees, and the offshore company doesn't have to pay taxes in the US. However, the initial cost is relatively high, so you probably don't need it now."

After listening, Chen Yiran remained silent for a while. In his previous life, he always followed the normal path in business and never resorted to so many unconventional tactics.

"Doesn't the IRS investigate? Isn't the US IRS supposed to be very powerful?"

Liu Zhiming chuckled and said, "First of all, this amount of money is nothing, the IRS doesn't need to bother with it. To them, one big fish is worth countless small fish. The probability of a multi-millionaire being investigated is only 3%, and the probability of a small account with a few million being investigated is only a fraction of a percent."

Besides, this is Chinatown! We've been neglecting our taxes for a long time now. Look at our restaurants, how many accept credit cards? What right do they have to care? All that talk about how powerful the IRS is, that's just stupid white and black people. They don't even bother with appearances; that's not called being audited, it's just grabbing business. If it were us Chinese, you think you could audit us? Take a place like yours, for example. They'd audit you for three to five years, make you owe tens of thousands in back taxes, and they wouldn't even recoup their costs, so why would they audit you?

Don't just listen to the domestic news hyping up how powerful the IRS is. It's not powerful at all. Look at Chinatown, we've been like this for so long, has anyone done anything about it? Abacus Bank is having some problems lately, but I'm telling you, don't worry. Mr. Sun can't possibly get into trouble. If he did, Chinatown would shut down completely to show him.

Chen Yiran was deeply shocked, but he still knew about the Guobao Bank incident. It was later made into a documentary, and the Sun Qicheng family of Guobao Bank was eventually acquitted.

The documentary shows Chinese people accusing major banks of refusing to grant loans and conduct many business transactions, which is true.

However, it is likely true that many people are saying that many businesses run by Chinese are not compliant with regulations.

Chen Yiran asked hesitantly, "How much do I need to pay in the proper way? Can you calculate it for me?"

Liu Zhiming rattled off the details: "The federal tax is 33%. The self-employment tax—legally, even though you're an F1 visa holder and don't earn a salary from the company, there's still this tax—it's levied on 92.35% of profits. Social Security is 12.4% for annual income below $106,800, and waived for anything above that. Medicare is levied in full at 2.9%. The Delaware state tax is 5.95%. All of that adds up to too much; it's not worth it at all."

Chen Yiran was completely overwhelmed by what he heard, so he quickly added outside help.

Jasmine starts.

The overall tax rate is approximately 38.8%.

More than half of it is handed over to the US government, no wonder people don't like to take the conventional route.

But Chen Yiran is different.

Chen Yiran looked at Liu Zhiming and asked a question he hadn't expected: "How long does it take to go through the proper channels? Can you reimburse me?"

Liu Zhiming pushed up his glasses, clearly taken aback. Having worked as a Chinese accountant for so many years, he had truly rarely seen a young person voluntarily and regularly pay their taxes.

"You want to go through the proper channels?"

"Yes. I may be developing my career in the United States long-term, and I don't want to leave any future problems."

Liu Zhiming put down his pen and looked Chen Yiran over again. After a moment, he nodded.

"Okay, let me explain it to you clearly. Single-member LLCs are subject to a through-tax system, meaning the company doesn't pay taxes at the corporate level. All profits, whether you withdraw them or not, are considered your personal income. You need to file your report using Schedule C on Form 1040NR."

He pulled out a new sheet of paper and began listing numbers.

"Let me calculate it. Net profit: $267000, federal tax: $66,776.24, self-employment tax: $20,393.86, Delaware personal income tax: $16,387.79. Total: $103,557.89. That's a lot, Chen."

Jasmine starts, how much do I have left?

[163,442.11, that's enough to pay off the debt.]

Seeing that Chen Yiran seemed a little distressed, Liu Zhiming continued, "You don't need to pay immediately. In the US, taxes are calculated annually plus quarterly advance payments. All income from 2010 must be declared by April 18, 2011. However, large sums of income must be paid in advance, otherwise there will be penalties. Your deadline for advance payment in the first quarter is April 15th, and the advance payment amount is 25% of the estimated tax for the whole year, which is about 40,000."

"How about withdrawing the money? If it's a normal withdrawal, how do I do it?"

"Owner's Draw. No board resolution is needed. You are a 100% shareholder; you can simply transfer money directly from the company account to your personal account. It will be recorded as an owner's withdrawal in the ledger. Taxes are calculated based on the annual net profit, and have absolutely nothing to do with how much you withdraw. Even if you don't withdraw a single penny, you still have to pay taxes on the full 30 in profits. If you withdraw all 30, you won't pay an extra penny."

"So, I'll withdraw the money first, prepay the taxes, and then settle the accounts next year when I file my taxes?"

"Yes, that's the idea. Every quarter, there's a mandatory prepayment of 26,790, and the same applies to the following three quarters. At the end of the year, the final accounts are settled. Any overpayment will be refunded, and any underpayment will be collected. However, if you don't pay, interest will be calculated at 4% annually compounded daily, plus a penalty of 0.5% per month for non-payment. You see, I still recommend you choose shareholder loans."

What a bizarre tax system! This is why so many Americans end up ruining themselves.

There's no such thing as bankruptcy for sole proprietorships; the money from the former IRS will haunt you for life. Many naive Americans make some money but don't use tax avoidance methods like some Chinese people do. They simply and foolishly spend it all, and if business doesn't go well in the second half of the year, their lives are ruined.

After thinking it over carefully, Chen Yiran realized there wasn't anything he absolutely needed the money for, so he said directly, "Uncle Liu, just prepay the entire year's amount for me, and I'll withdraw the rest."

Liu Zhiming nodded: "Sure. You opened your personal account at Guobao Bank?"

No, not at all.

"It's alright, you can just get one. We have a card issuing machine here that can give you one on the spot. It's an internal transfer within the same bank, so the money will arrive instantly. Come with me, I'll take you to the counter to do it."

Before standing up, Liu Zhiming hesitated for a moment, but still said one more thing.

"Xiao Chen, for a business of your size, if you go through all the legal channels, the taxes will indeed be substantial. However, you're doing the right thing. You're young, and you have a long road ahead of you. We old hands can skirt the rules, but you can't. Hey, the reason why Chinese people aren't well-liked is partly because they're too clever. Only fools are popular; smart people are envied."

Chen Yiran stood up: "I know, thank you Uncle Liu."

"You're welcome. By the way, that nominal manager, Old Chen, doesn't need your signature. Withdrawals by the owner are the shareholder's authority, it has nothing to do with the manager."

The two went downstairs together, and Liu Zhiming took him to the Flushing branch of Abacus Bank.

As expected, they were deeply intertwined. Liu Zhiming greeted the people behind the counter and didn't need to queue at all.

Chen Yiran first opened a personal account and got a bank card. Then she filled out a transfer form to transfer $160000 from Chen Trading LLC’s corporate account to her personal savings account. The transaction was completed in less than ten minutes at the counter.

Chen Yiran checked the bank message on her phone and confirmed the balance.

As he left the bank, Liu Zhiming shook hands with him at the door.

"This time it's 350. I can do your accounting every month for 200. Tax filing is separate. Just call me if you need anything."

"OK."

Chen Yiran drove back to Flushing Main Street and stopped at a restaurant called Beijing Restaurant, where he ordered a bowl of Zhajiangmian (noodles with soybean paste).

Before the food arrived, I checked the time and it was already noon.

Then he called Xu Li.

"Hey, boss."

"I'll come find you after class this afternoon and give you the check."

"So fast? I thought I'd have to wait several more days. Now that you have some free time, can you take me out for a couple of rides?"

"Okay, I'll take a look for you. Getting a car dispatched is easy."

"It's settled then, we'll take action this weekend."