Tax Tips
Managing your money

By Howard Abrams, PBS Tax & Bookkeeping

I'm a self-employed owner-operator who is married with three children. I can't sleep at night because I worry about what will happen to my family if something happens to me.

A You are the sole support of your family, and therefore have a huge responsibility to protect them. As a group, truckers are among the unhealthiest people in the country. Many drivers cannot even use their seat belts because their stomachs are too big. Also, they are more susceptible to accidents since they are on the road for so many hours.

How can I protect my family?

Our suggestion is to find an insurance agent to help guide you through insurance products that are available. You will need disability insurance, enough to replace the annual income you earn as a self-employed owner-operator. If you become disabled, your family's living expenses will continue. Make sure your health insurance will cover potential major medical bills. A term life insurance policy may make sense.

How do I go about figuring how much I'm spending on my personal living expenses? What should I do?

Since you have already completed your 2014 income tax return, you should determine what your personal living expenses for 2014 were. Assuming you have a personal checking account, all the money you spent during 2014 should be in that checking account. For example, checks written for personal bills including your food, rent or mortgage, credit card payments, checks to yourself, to utilities etc. will be listed on your check register. You will need to include debit card expenses and all fees such as bank and ATM. Include all personal expenses incurred for the year.

Do not include business expenses. Allocate each item to categories such as mortgage payments, health insurance, telephone, insurance, heat, water, gardening, food and entertainment. Don't forget to allocate your credit card charges and to account for ATM withdrawals.

Then add the totals of each category together to find all the money you spent personally for 2014. I bet you will be shocked. This will be the amount you will need protection from with your disability insurance. You can also take your annual personal expense and compare that total to the net profit from your business, which you will find on your form 1040 Schedule C of your income tax return. Then subtract your living expenses for the year from your net income on your tax return. If your personal expenses are higher than your net profit, maybe you are spending too much. If your personal expenses are less than your net profit, you should have money on hand. If you don't, you need to find out why. Maybe you are missing some deductions?

What does all this mean and do?

This will verify what your annual living expenses are for purposes of disability insurance protection and to satisfy yourself that the net profit you are paying taxes on was correct. Therefore, you will know if what you owed to the IRS was accurate. So take the business net profit and compare it to your personal expenses. If what you spent personally is approximately what your net income was, then your net profit is probably accurate, as well as your annual living expenses. LL

This article has been presented by PBS Tax & Bookkeeping Service, a company which has been providing income tax and bookkeeping services to the trucking industry for over a quarter century. If you would like further information, please contact us at 800-697-5153. Visit our website at

Everyone's financial situation is different. This article does not give and is not intended to give specific accounting and/or tax advice. Please consult with your own tax or accounting professional.