When accident injuries prevent you from working and earning
a living, the consequences can be devastating. It doesn’t take long to get
behind on rent payments, car expenses, or a mortgage. Whether you broke your
arm in a car crash, or fell and suffered a slipped disc, you deserve to be compensated
if another person or party was at fault.
It’s standard practice for personal injury claimants to seek
damages for loss of income, also known as lost wages or lost earnings. But what
if you’re self-employed? By some estimates, nearly 2 million New Yorkers are
currently self-employed. How do you calculate loss of income when earnings can
fluctuate on a week-to-week basis? Self-employed workers, just like those with
stable salaried positions, deserve to be reimbursed for the amount of earnings
they would have made had they not been injured.
How to prove loss of
self-employed earnings
This loss of income isn’t limited to direct payment from
clients for services rendered, but also lost business opportunities, loss of
future contracts, and the loss of goodwill. The self-employed are entitled to
recover all of these damages, but the process of proving your lost earnings is
much more complicated.
A New York personal injury lawyer can help injured claimants gather the supporting documentation necessary to prove the loss of self-employment earnings. Bear in mind that the income must be reported and documented in order to seek reparations. If you regularly take cash payments “under the table” for freelance work, it will be impossible to prove this income in a car accident or injury claim. Your attorney will need a strong paper trail to bolster your claim.
This will likely include:
- 1099 tax
statements: The key to a successful recovery is to demonstrate how much
money you would have earned from the date of your injury until the end of your
recovery. One of the most convincing documents to support this are 1099 forms,
which show earned income from the previous year. - Business
invoices and contracts: Many self-employed workers have short and long-term
contracts with third-parties that stipulate remuneration amounts for services
rendered. - Bank
statements: Your bank statements should demonstrate your regular flow
of income (and expenditures), particularly if you have a long history of
regular deposits. - Letter of
verification: If you have been freelancing for a particular client over
time, request a letter in which they explain your position, job duties, number
of hours, and compensation. - Medical records:
Proof that you suffered an injury and need time off of work to recover.
No-Fault insurance
law and lost wage reimbursement
New York is one of 12 states with no-fault insurance laws. This means that if you are in an auto accident, the insurance company should cover 80 percent of your lost earnings, regardless of who was responsible for the accident. If you are self-employed, insurance companies will normally ask for the last three years of your tax returns and recent bank statements. No-Fault coverage will cover a maximum of $2,000 a month for lost income until the $50,000 limit is reached.
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How a personal injury
attorney can help
For people with steady self-employment income, calculating
your damages is fairly straightforward. If,
however, your business or work had been growing substantially prior to the
accident, with a marked increase in income, you should consider legal counsel.
The right law firm will work with forensic economists who are trained to quantify
economic losses for civil litigation.
Proving lost income for self-employed workers is invariably more difficult, which is why your choice of legal representation is key. To secure fair compensation, you’ll need the guidance of a skilled personal injury lawyer.
Douglas & London provides aggressive representation in
all types of personal injury matters. We give each client the attention and
respect they deserve and have helped hundreds of New York families recover the
justice they deserve. Call today to schedule a free, no-obligation case review.
