If you sustain serious injuries in a car accident, you may be unable to work for weeks, months, or even years. If the crash occurred because of someone else’s negligence, you may be able to pursue financial compensation for your lost income. In most cases, your claim or lawsuit should include the income already lost as well as the projected income you may lose in the future.
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How Do I Calculate My Current Lost Income After a Car Accident?
To be compensated for lost wages after a car accident, calculate how much income you have lost. This calculation also includes benefits (e.g., health insurance) from your employer.
If you make $500 per week and you missed four weeks of work, you have the right to $2,000 compensation for lost wages. Base this calculation on your gross income. (Net income is the money remaining after taxes and other standard deductions).
What Documents Do I Need to Prove Lost Income?
Typically, your lawyer will use your most recent pay stubs or wage statements to document your regular income. A letter from your employer may also suffice for this documentation, as long as it details your position, compensation structure, and how long you were out of work.
If you do not typically work a full-time (40 hours per week) job, you may have to provide additional documentation, such as your income tax returns for the prior year(s). Several weeks or months of pay stubs may also help obtain an average weekly income value.
If you work in a service industry where tips make up a significant part of your income, you will have to provide additional documentation. If you collect your tips primarily through credit card transactions, or another method with a reliable paper trail, you can easily document this aspect of lost income.
If you collect tips in cash, you can document this using your tax returns – but only to the extent that you have claimed your tips in the past.
What About the Income I May Lose in the Future?
If your injuries will prevent you from working in the future, the at-fault driver is liable for those losses as well.
Your car accident lawyer will need to obtain medical opinions or other expert testimony about your inability to work in the future. If you will miss work for six months, for example, your claim should include the value of six months’ income.
If you sustained a significant long-term injury or disability, however, it may affect your lifelong earning capacity in a more profound way.
For example, if you worked in a warehouse or on a loading dock, your job may have required you to lift heavy objects. If you sustained a long-term spine injury, you may have lost the physical ability to continue in that position. If you must consequently take a lower-paying, non-physical job at a lower hourly wage, you can claim the difference between your prior earning capacity and your future, reduced ability to earn a living.
Physical injuries are not the only legitimate type of disability that can occur from a serious car accident. If you developed a psychological or mental challenge such as PTSD or severe anxiety – and if that condition interferes with your ability to work – you have the right to claim that lost income as well.
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Can I Be Compensated for Lost Income if I Am Self-Employed?
If you are self-employed, you also have the right to receive compensation for lost income. The biggest difference is in how you will demonstrate your historical income in your car accident claim.
Your car accident lawyer may use your federal income tax returns from the two years prior to the accident. If you bill your clients each month, you could look to your accounting records to demonstrate a drop in your monthly billing amounts.
Self-employed accident victims may also pursue compensation for lost opportunities – although this may present a more complex challenge for documentation.
You might provide copies of your daily or weekly calendars to your lawyer, showing the number of appointments you typically went on in a week. Or, if you had existing contracts for work you could not complete due to your injuries, those may serve to document lost income.
If you are a business owner or entrepreneur, your accountant or CPA may help you demonstrate business volume before and after your accident. You can support those records with copies of your business bank statements.
A car accident lawyer can help. Call the Law Firm of Anidjar & Levine at 800-747-3733 to schedule a free consultation to discuss your lost income after a car accident.