If a negligent driver caused your injuries in an auto collision, you are entitled to compensation from him, including reimbursement of your lost wages. This amount can be easier to calculate if you receive a regular paycheck. However, it can be more complicated to determine how much you should receive if you are self-employed.
Who Is Considered Self-Employed?
You are generally considered self-employed if you are a freelancer, independent contractor, consultant, or sole proprietor of a business. You decide your own hours of work and whom you will work for. This is in contrast to an employee who works for an employer who dictates his wages, hours of work, and job duties.
How Are Self-Employment Wages Determined?
If you are self-employed, the first step in knowing how much you should receive is to understand the types of damages you can request. Your wage loss claim may include:
- Lost income
- Loss of your earning capacity if you are disabled or unable to work in your profession
- Lost profits
- Business opportunities you lost
Lost income claims can be more complicated to calculate because income and lost profits tend to vary month to month and year to year for some people who are self-employed. Here are documents that can help you figure this out and prove this portion of your claim:
- Independent contractors. If you are a consultant or independent contractor, you most likely receive a form 1099 at the end of the year from the clients you work for, which can be used to establish your lost income. However, you may need additional documentation of your monthly income if it is seasonal or is not the same every month. Tax returns can also be helpful if your income is different each year.
- Small businesses. You may need monthly profit-and-loss statements, receipts for expenses, and payroll and account records to figure out how much lost income, profits, and other damages you deserve. Your tax returns and schedules may also be helpful, but these other documents can help paint a more accurate picture of your income.
An experienced car accident lawyer can help you identify the documents you need and can calculate the amount of wage loss damages to request in your settlement. If your situation is complicated, he may recommend that you also hire an economic expert.
At Tavss Fletcher, we have decades of experience fighting for the rights of victims of car accidents. We understand the steps you need to take to obtain a fair settlement and are here to handle all aspects of filing your claim for you. Call our Norfolk office to schedule your free consultation today.