Hi,
I have a question about maximum pension contributions to a UK pension and reporting contributions on US tax returns.
Buzzacott's link:
http://www.buzzacott.co.uk/getattachment/c1e92ddc-d348-4c33-82c9-b56682bad017/how-us-citizens-can-make-the-most-of-uk-pensions-c [nofollow] I'd followed the same approach mentioned in that link and contributed as much as I could to start making up for years of jobs without decent pensions (my current employer contributes 1%). Buzzacott's link does say 'You will not usually be able to claim full tax relief for your UK pension contributions on your US return but it does not usually impact the US liability.'
Looking through the other posts here, I can see the conversations on using (explicit or implied) of the tax treaty to exclude pension contributions or using FTCs to cover liability.
So, is there an upper limit on how much can be excluded? If there is, is there some other way you can limit the US liability as implied in that link? In other words, if there's a limit of $25k and someone had contributed $40k (well within the numbers in the link above, but not what I did!) then they would have to show $15k as income (not pension excluded), but from the UK perspective, no tax on that was paid. FTCs aren't likely to cover the extra $15k, right? Am I missing something?