Detailed answer — What you must prove and how New Jersey law treats lost-earnings claims

When a self-employed person loses income because of an accident, New Jersey law allows recovery of lost earnings and lost business profits so long as the loss is proven with reasonable certainty and causation (that the accident caused the lost income). How you prove those losses depends on the type of claim you bring:

• Tort claim against a negligent third party (e.g., car crash, slip and fall): you seek damages for past and future lost earnings and profits.
• Auto insurance first-party claims (Personal Injury Protection/PIP) and certain benefit claims: these follow applicable insurance-law rules and policy limits under New Jersey motor-vehicle laws and your policy terms. See New Jersey statutes and motor vehicle law resources at the New Jersey Legislature: https://www.njleg.state.nj.us/.
• Workers’ compensation (if the injury happened at work or in the course of business): file with the New Jersey Division of Workers’ Compensation. See New Jersey Department of Labor & Workforce Development: https://www.nj.gov/labor/workers-compensation/.

Courts require that lost earnings be shown with reasonable certainty — courts will not award speculative amounts. For self-employed people, courts look beyond a single pay stub. They will want consistent, corroborated business and tax records that demonstrate how much you earned before the accident, how your business changed after the accident, and how those changes are attributable to the injury.

Core categories of admissible evidence

Collect and preserve documentary, electronic, and testimonial proof that together create a reliable record of your pre- and post-injury income. Typical evidence includes:

• Tax returns (federal Form 1040 and Schedule C or partnership/LLC returns): these show year-to-year earnings and net profit/loss.
• Business profit & loss statements and balance sheets prepared contemporaneously.
• Invoices, contracts, and paid receipts from clients showing billed amounts and the work performed.
• Bank statements and merchant-payment processor records (Deposits, Stripe/PayPal, credit-card merchant reports) that show deposits and payments received.
• 1099s and W-2s if some income came via 1099 contractors or partial employment.
• Appointment calendars, work logs, and project schedules showing booked work you had to cancel or could not perform because of the injury.
• Emails, text messages, or messages with clients confirming cancellations, lost jobs, or delayed projects due to your injury.
• Advertising and marketing records (e.g., listings, ad invoices) to show business activity and changes.
• Expert analysis — a certified public accountant or forensic accountant can analyze records and prepare an opinion on lost profits, separating personal expenses from business costs and computing net lost earnings.
• Photographs or video documenting injury-related limitations that prevented you from doing work.
• Contemporaneous diary or log documenting daily work capacity and missed work. Courts favor documentation kept close in time to the events.

How to calculate the amount you can claim

Self-employed claimants often recover net lost profits (revenue minus ordinary business expenses) rather than gross receipts. To calculate a reliable figure:

1. Establish a baseline: average your earnings over a reasonable pre-accident period (12 months or several years for seasonal businesses).
2. Demonstrate the decline: compare baseline earnings to the actual post-accident results (or to work you demonstrably lost).
3. Adjust for expenses: subtract ordinary business expenses you no longer incurred only if those expenses would have continued regardless. An accountant can help allocate fixed vs. variable costs and avoid double-counting.
4. Forecast future losses with reason: if the injury reduces your future earning capacity, use contemporaneous bookings, contracts you lost, and expert projections to support a future-damages number. Courts require a reasonable basis for future-loss projections.

Using business records and evidence in New Jersey proceedings

Business records (invoices, ledgers, bank statements, tax documents) are typically admissible under the business-records hearsay exception. New Jersey courts recognize business records as reliable when prepared in the regular course of business. You will usually need to authenticate the records — often by affidavit from you or a record-keeper or by live testimony from a certifying witness or an accountant.

For guidance on New Jersey evidence and court rules, see the New Jersey Courts resources on rules of evidence: https://www.njcourts.gov/. If you plan to use an accountant’s report, attach and authenticate underlying documents (tax returns, bank statements, invoices) so the report is supported.

Practical walkthrough — an example checklist

Imagine you run a one-person consulting business and you hurt your back in an auto collision. Use this checklist:

• Collect the last 3 years of federal tax returns (Schedule C).
• Pull your bookkeeping P&L statements and bank deposits for the last 18–24 months.
• Compile invoices and client contracts for the 12 months before and after the accident date.
• Gather correspondence showing canceled projects and client communications agreeing to reschedule or decline work because you were incapacitated.
• Keep a daily log of missed work, with dates, length of jobs, expected fees, and who cancelled because of you.
• Hire a CPA to produce a lost-profits report explaining how your net profits were reduced and why those losses are attributable to the injury.
• Preserve medical records and opinions linking your physical limitations to the inability to work.

Common defenses and how to respond

Opposing parties often challenge self-employed lost-wage claims by arguing speculativeness, inadequate documentation, or that pre-existing business decline caused the shortfall. To respond:

• Use multi-year tax and financial records to show consistent pre-accident earnings.
• Use contemporaneous client communications and canceled contracts to tie specific lost jobs to the accident.
• Get a qualified accountant to segregate loss due to the injury from other business factors.
• Document mitigation: show steps you took to limit losses (e.g., subcontracting, modified duties, marketing efforts). Courts expect you to mitigate damages if reasonably possible.

Because New Jersey courts evaluate credibility and certainty, detailed contemporaneous business records and qualified expert support significantly increase the chance the court or insurer will accept your claim.

Helpful Hints — Practical tips to strengthen your claim

• Start documenting immediately. A contemporaneous log and preserved invoices are far stronger than reconstructing months later.
• Keep originals of bank statements, deposit slips, and merchant reports (e.g., Stripe, PayPal) showing where money actually cleared.
• Get written statements from regular clients verifying your usual workload and that they canceled work because of your injury.
• Use an accountant early. They can advise what records to preserve and may prepare a reliable lost-profits report for negotiations or court.
• Separate personal and business finances. Mixing accounts weakens proof. If you did mix them, an accountant can help trace business receipts.
• Preserve digital records: back up emails, cloud invoices, bookkeeping files, and calendars with time stamps.
• Mitigate losses when possible (subcontract, reschedule) and document mitigation efforts — doing nothing can hurt your claim.
• Keep medical records and provider statements connecting your physical limitations to work restrictions. Damages require both causation (accident caused injury) and linkage (injury caused lost income).
• Consult a New Jersey attorney early if the claim is large or the other side denies responsibility. An attorney can guide evidence gathering, negotiate with insurers, and prepare for court if needed.

Resources:

• New Jersey Legislature (statutes and motor vehicle insurance laws): https://www.njleg.state.nj.us/
• New Jersey Courts (rules, evidence guidance): https://www.njcourts.gov/
• New Jersey Division of Workers’ Compensation: https://www.nj.gov/labor/workers-compensation/

If you want, I can provide a checklist tailored to a specific self-employment type (for example: contractor, consultant, gig-worker, tradesperson) and a sample template for a lost-work log or evidence packet you can prepare for an attorney or insurer review.