I am Self Employed. How is my Wage Loss Determined in my Personal Injury Claim?

At times, injuries and/or the medical appointments required to heal from the injuries, can cause a person to sustain a wage loss as part of their personal injury claim. A larger wage loss claim may exist when the injuries a person sustains does not allow them to return to their previous vocation. Not all wage loss claims are equal. This is especially true when a person is self-employed.

Often, proving lost wages for a self-employed person can be difficult. However, it can be done.

One way to prove that wages were lost by a self employed person is by comparing tax records from the years prior to the injury versus after the injury. If the claim is being negotiated prior to the filing of the most recent tax return, the prior tax records nonetheless provide some idea as to the loss a person is sustaining now. The IRS provides a list as to the type of documentation that is acceptable to prove income and sales. This list can help provide ideas to small business owners as to what documents they should be maintaining in their files and that would be useful to your personal injury attorney.

Additionally, any documentation regarding contracts that were cancelled and/or had to be sub-contracted out as a result of the injury could help document a wage loss for the self-employed person. If the business owner maintained a calendar of upcoming projects, this calendar can serve to help determine wage loss.

construction workers.jpgAt times, a business owner will pay a larger payroll out to employees during the time they are recuperating from injuries. If employees are handling work typically performed by the business owner, payroll records indicating the usual amounts paid out to employees versus the payroll records post injury may also help document the loss income a business owner has incurred.

To have a successful wage loss claim, it helps if a business owner has maintained documentation of their business dealings post-collision and pre-collision, file business and personal taxes annually and do not have ‘cash only’ business.

The Edward A Smith Law Offices has represented many business owners who have sustained substantial loss to their businesses. We have successfully obtained reimbursement for them. If you are looking for a personal injury attorney and are a business owner, please call our office (800) 404-5400 so that we can discuss your unique situation.

Photo Attribution: Bundesarchiv, Bild 183-P0619-0011 / CC-BY-SA [CC-BY-SA-3.0-de (], via Wikimedia Commons

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