Calculating Lost Income for Self-Employed Individuals After a Car Accident
It’s a devastating blow when a car accident causes you to lose out on income. It can be even harder for self-employed individuals. While those who are traditionally employed may be able to tap into sick leave or paid time off, self-employed workers generally have neither of those benefits. On top of that, proving your lost income is much harder than it is for a traditional employee.
Luckily, you don’t have to go through this process alone. With the team at Reeves & Mestayer, you can pursue full compensation after an accident. We’ll help you every step along the way, from gathering evidence and proving the extent of your injuries to documenting your lost self-employed income. Call us at 228-300-2754 to set up a consultation now.
The Length of Your Self-Employment History Matters
You likely already know that you have quite a hurdle to clear when it comes to proving your self-employed income. While most employees get paid a base hourly wage or annual salary—both of which are easy to calculate when you have unpaid time off of work—self-employed workers often have a fluctuating income.
The longer you have worked in your current field, the harder it will be for the insurance company to refute your income claims. If you’ve been working for yourself for a month, it will be very difficult to show that you actually lost any income because of the accident. On the flip side, if you have worked for yourself for five years and have brought in about 10% more income each passing year, it is much harder for the insurance company to claim that your income is too unpredictable to compensate.
Track Overall Annual Income
You may want to start by providing conclusive proof of how much money you generally earn in a year. Again, the more years of income history you have, the stronger your claim may be. If you have any self-employment accounting software, such as QuickBooks, pull annual reports from there to show how much you have earned in previous years. You may also want to generate a year-to-date report to show what your earning trajectory for the year was prior to the accident.
Tax documents are another great source of evidence for income claims. No one wants to get into trouble with the IRS, so it’s widely accepted that tax returns are strong proof of income. Download copies of your recent tax returns, going back at least three years. Your attorney will tell you if you need to provide further documentation.
Account for Seasonal Differences in Income
Once you’ve provided information on your annual income, you may want to include proof of seasonal differences in income. For example, imagine you do pet portraits for a living. You are injured in November, which leaves you unable to work for the entire Christmas season—your busiest time of year.
While your annual income may be one amount, the months leading up to Christmas may be over half of that income. Monthly income reports, completed invoices, and bank deposits may be useful at this stage of your claim.
Look for Concrete Proof of Lost Income
Trends and past data are one way to prove that you lost out on income as a result of your accident. However, you may also want to supply documentation of specific projects and jobs you were unable to complete because of your injuries. If you have specific orders from clients that you were not able to fulfill, canceled invoices related to unfinished work, or statements from clients can prove the current income you lost because of your injury.
While demonstrating lost self-employed income can be a challenge, it is not impossible. With a reliable and aggressive attorney, you can get the assistance you need as you pursue compensation.
Start Your Claim with Reeves & Mestayer
If you’ve been the victim of a car accident, you may be entitled to compensation for your losses. The sooner you begin your claim, the more evidence you may have available to you. Get started now by calling Reeves & Mestayer at 228-300-2754 or sending us a message online.
