If you were injured in a car accident, you might be experiencing some tough financial times. Expenses like rent, utilities, and medical bills may be harder to cover when you’re unable to work. This is especially true if you’re self-employed.

However, by bringing a lawsuit, you can be compensated for your losses and you can recover expenses you incurred as a direct result of the accident.

One type of compensation that you may be entitled to is lost wages. But how do you recover lost wages if you’re self employed? While it is more difficult to show lost self-employment income, it is not impossible. If you can show how much you would likely have made had you not been in the accident, you may have a wage loss claim as a self-employed individual.

However, because proving lost self-employment income can be more challenging than proving lost regular employment income, you should have an experienced personal injury attorney on your side.

At Kapuza Lighty, PLLC, we have seasoned auto accident attorneys who can help get you the most compensation possible after suffering a car accident injury. If you have questions or would like to schedule a free consultation, you can call us at (509) 866-4166 or send an online message.

Defining “Self-Employed”

Before you bring a legal claim, you should understand the difference between an employee and an individual who is self-employed. 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.

An employee, on the other hand, has an employer who pays them a wage and pays the employer portion of your FICA taxes. Employees can be full time, part time, or seasonal workers.

Proving Lost Self-Employment Income

After a car accident, lost wages of a self-employed individual may be difficult to prove. And unfortunately, if you are self-employed, a car accident injury 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. Further, the documentation must be persuasive proof of these work-related damages. Otherwise, it may not be possible to recover compensation for these losses.

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.

Contact a 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 online or call (509) 866-4166 today.

The statute of limitations governing the amount of time you have to make a claim for compensation has likely started to run, so avoid delay.


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