UK pension & employers contribution

Hello,

I've just begun my tax return (last minute as always!) and this year I have a new issue - my employer has started contributing to a pension (as have I).

The total for 2014 is really small - but I have no idea what to do with the numbers.

I know nothing about how pensions work in regards to my tax return.

Any help is appreciated.

OK, looking at my last paystub in 2014 my employer contributed 80.98 & I contributed 68.05 to the pension scheme.

I, obviously, didn't have a year end statement yet as the UK tax year hadn't ended. I have one now which shows the investment gain between 01 Apr 2014 & 31 Mar 2015 (haha, 13.54 baby!). I'm guessing I do something with that investment gain next year and not this year, as it includes totals contributed in the beginning of 2015.

Why must this be so difficult?!

Hi,

I am in a similar situation trying to start my tax return today and also a bit confused on this as I started making payments to a pension through my employer during 2014 as well. 

What I have interpreted from doing a bit of research, which I hope is correct, is that the  payments made in to the pension from myself or my employer, and any gains on its value will not have to be reported on my 1040 tax returns this year, and would only start to make an effect on my 1040 forms when I start to draw payments out from it and it becomes income.  That would therefor only make it an issue for a few decades down the road, I hope.  But I would not take my word for it so would also appreciate if someone could confirm this is correct. 

Assuming that was correct the other confusing point regarding the pension I encountered was whether to report my total income on line 7 of my 1040 as my total gross salary for the year, or only my "taxable income" which does not include the payments I made into the pension since they are done pre-tax.  In the end I decided to use my gross salary, as I will be deducting the entire amount on a 2555EZ anyway regardless of which I chose, but not sure if that is the correct way to do it.

However I'm also not sure if the account value of the pension will have to be reported on a FBAR if I meet the filing threshold, which I haven't determined yet.  I assume that it would need to be reported, but I didn't file one last year so have not yet looked into it.

My understanding, if it's a standard defined contribution pension, is that you only have to declare the employer contribution. Your contribution is actually part of your gross income, and the gains don't matter at this point. The way I handled it when I had to do it was I added the employer contribution to my gross income total.

There are two basic ways to approach UK pension plan payments: either declare both the employee and employer contributions on your 1040 and pay US tax on them; or don't include them on the 1040 and claim a treaty exemption and then pay income tax when you eventually start taking pension income. Both approaches have been covered in numerous posts. The first approach is often better if you plan to retire in the US as UK FTCs might cover the US tax due leaving you with a US tax free basis in the pension. The second approach involves less paperwork and requires less record keeping.