The purpose of bringing a lawsuit or seeking a settlement after a car accident is to compensate you for your economic losses.
These are monetary losses you suffer as a direct result of the car accident, and for many people with serious injuries it includes lost wages.
But what happens if you are self-employed? To receive car accident lost wages, self employed people will need to prove, with sufficient evidence, how much they were likely to have made had they never been involved in the accident.
This can be a challenge, so reach out to a Yakima car accident attorney today.
Generally, you will be considered self-employed if you are a freelancer, independent contractor, or own your own business. For example, someone who works as a hairdresser is considered self-employed if they have their own hair salon.
Basically, you aren’t self-employed if you work for someone who pays you a wage and pays the employer portion of your FICA taxes.
Proving Lost Self-Employment Income
If you are self-employed, an injury accident could cause you to suffer greater economic damage than a traditionally employed person might sustain. The challenge lies in calculating the amount of your actual damages and providing acceptable documentation to support those losses.
Without a history of salary or hourly wage earnings from an employer, self-employed accident victims must find other ways to document work-related damages. Unless you can provide persuasive proof, you may not recover compensation for these damages.
Depending on what you do for a living, you may be entitled to recover compensation for your lost income as well as:
- Lost profits,
- Lost return on investment,
- Lost opportunities, and
- Lost goodwill.
To prove a wage loss claim, self-employed individuals might consider one or more of the following strategies.
Documenting Past Income
If you can document your past income using copies of tax returns, 1099s, bank records, etc., you can calculate what you likely would have earned if you hadn’t sustained injuries. The longer and steadier your income history is, the easier it may be to prove your damages.
If you own a small business, you may be able to accomplish this goal using profit and loss statements or accounting records.
Documenting Lost Work
If you had upcoming work that you were unable to complete, you can document these losses using canceled contracts or letters from clients stating they gave the work to someone else.
Documenting Increased Expenses
After a car accident, lost wages for self-employed persons may include extra costs you were forced to pay out in your absence. If you engaged others to complete work that you could not, for example, providing invoices and proof of payment for those expenses can help document your losses.
Getting an Expert Opinion
If you don’t have sufficient documentation to support your income losses—or to support more complex losses such as opportunities, goodwill, investment of profit losses, etc.—engaging the help of a subject matter expert may be beneficial.
An economic expert can review the details of your work and calculate the value of your work-related damages. The expert can then provide opinions or testimony to support your claim.
If your injuries prevent you from returning to your job, an economic expert can establish the potential value of your diminished earning capacity damages.
Your Yakima Car Accident Attorney
As you might imagine, proving self-employed income losses on your own could be difficult. Insurance companies often attempt to deny compensation for lost self-employment income citing insufficient proof or documentation. An experienced personal injury attorney understands these challenges and how to address them.
Your lawyer and legal team can call on their network of resources, using investigators, subject matter experts, and others to help build a persuasive claim on your behalf.
Kapuza Lighty has helped many self-employed victims receive compensation for lost income. We are well versed in finding the documentation necessary to establish your monetary loss, and we have helped many self-employed victims receive favorable settlements
For more information about our services, please contact us today. You have a short amount of time to make a claim for compensation, so avoid delay.