How a Self-Employed Tennessean Can Prove Lost Wages After an Accident

Quick summary: If you are self-employed and you miss work because of an accident, you can recover lost earnings, but you must document both the injury’s effect on your ability to earn and the amount you actually lost. The strongest claims rely on contemporaneous business records, tax returns, client contracts, bank statements, and expert analysis that tie the income loss to the accident.

Disclaimer

This article is for general information only and is not legal advice. I am not a lawyer. For advice about your situation, consult a licensed Tennessee attorney.

Detailed answer — what you need to prove and how to prove it

1. What the claimant must prove

To recover lost wages after an accident you must show three basic things:

• The accident caused an injury.
• The injury prevented you from doing work you would otherwise have done.
• The amount of earnings you lost because of that inability to work.

For self-employed people, courts and insurers expect evidence of both your usual income and the income you actually lost during the recovery period.

2. Best documentary evidence to gather (order of strength)

1. Tax returns (Schedule C, 1099s, K-1s): Your federal income tax returns (last 2–3 years) are usually the best baseline for annual income and business expenses. Tax records show net profit/loss and establish historical earning patterns.
2. Profit & loss statements and business ledgers: Monthly or quarterly profit & loss (P&L) statements before and after the accident show the actual decline in revenue and net income.
3. Bank and merchant account records: Deposits, cleared checks, PayPal/Stripe reports, and other payment processor statements show cash flow and invoice payments received or missed.
4. Invoices, contracts, and client communications: Signed contracts, canceled bookings, emails or texts about postponed or lost jobs, or proof clients stopped paying because you couldn’t perform work.
5. Receipts for mitigation efforts: Records you tried to hire help, subcontract, or otherwise mitigate losses. Courts favor claimants who tried to reduce damages.
6. Contemporaneous daily logs or calendars: Appointment books, job logs, or scheduling apps showing lost appointments or cancelled jobs that coincide with the injury period.
7. Medical records and physician testimony: Docs that connect the injury to work restrictions (e.g., doctor’s notes saying you could not work for X weeks). These link the injury to the inability to earn.
8. Affidavits and statements: Sworn statements from clients, subcontractors, or regular customers confirming cancelled work or lost income.
9. Expert analysis: A forensic accountant or vocational expert can reconstruct income and compute lost profits, especially when records are messy.

3. How to calculate lost earnings for a self-employed person

There are two common approaches:

• Lost net income approach — Compare your net profit (after ordinary business expenses) during a similar pre-accident period to the net profit during the injury period. Use tax returns and P&L statements to compute an average monthly or weekly net.
• Lost gross revenue approach — Compare gross revenue if your business model and expenses make gross revenue a better measure of lost opportunities (for example, if expenses would not have been incurred during the missed jobs).

Which approach is appropriate depends on the type of business. Courts and insurers typically expect lost profits (net) rather than gross revenue, because businesses subtract ordinary costs when calculating what the owner actually lost.

4. Example (hypothetical)

Hypothetical: You are a self-employed photographer who historically billed $4,000/month gross with $1,000/month ordinary expenses — net $3,000/month. After an accident you missed four months of bookings and made $800/month (net). Lost net income = ($3,000 – $800) x 4 = $8,800. Include documentation: tax returns, monthly P&L, client cancellations, bank deposits, and a doctor’s note documenting the period you couldn’t work.

5. Dealing with partial disability and mitigation

If you could do some limited work (or hired someone else), report net losses after mitigation. Tennessee law and courts expect claimants to mitigate damages — that is, take reasonable steps to reduce the financial impact of the injury (for example, doing administrative tasks while hiring help for physically demanding work).

6. Future lost earning capacity

If the injury causes long-term reduced earning capacity, you must present evidence of expected future earnings loss. This usually requires expert testimony (economist, vocational expert, or accountant) plus medical evidence establishing permanent limitations.

7. Insurance claims versus civil lawsuit

Insurance adjusters may accept simpler proof (invoices, bank records, doctor’s note). In a lawsuit you will need fuller proof admissible in court. Keep original records; make notarized affidavits when possible; preserve emails and client messages.

How Tennessee-specific procedures can affect your claim

In Tennessee, as elsewhere, the basic legal requirements for a personal injury lost-wages claim focus on causation and provable amount. If the injury relates to a workplace incident, workers’ compensation rules (Title 50 of the Tennessee Code) may apply and change what you can recover. If you pursue a personal-injury claim against a third party, document causation and losses carefully so a jury or insurer can evaluate them.

For general information about Tennessee workers’ compensation statutes and claims administration, see the Tennessee Department of Labor & Workforce Development or the Tennessee Code on the Tennessee General Assembly site: https://www.capitol.tn.gov/

When to hire a lawyer

• Dispute over causation (the other side denies the injury is connected to the accident).
• Large or complicated income-loss calculations, especially when future earning capacity loss is alleged.
• Insurer refuses to pay or offers a low settlement.
• Your records are incomplete and need forensic reconstruction.

Helpful Hints

• Start collecting evidence immediately. Contemporaneous records are far stronger than reconstructed ones.
• Keep originals and make backups (scans, cloud copies). Save emails, text messages, client messages and appointment calendars.
• Keep clear, dated daily notes about what work you did or could not do, and why.
• Use your tax returns to establish a baseline. If your business fluctuates, average multiple years.
• If possible, get written statements from clients, vendors, or subcontractors confirming canceled jobs or lost revenue.
• Document mitigation: invoices for hired help, receipts, or evidence you tried to replace lost work.
• Get and keep complete medical records that tie your physical limitations to the exact time you missed work.
• Consider a forensic accountant if records are messy or the defendant/insurer challenges your calculations.
• Don’t sign a quick insurance release without understanding whether the payment fully compensates lost income and future losses.
• Talk to a Tennessee attorney early if the claim is large, contested, or involves permanent impairment.

Final note

Self-employed claimants can prove lost wages, but doing so requires careful recordkeeping and often expert help. Focus on contemporaneous evidence, clear linkage between injury and inability to work, and reasonable calculations of net loss. If you need help assembling or presenting your claim, consult a Tennessee attorney who handles personal injury and economic-damage proof.