Filing US taxes - report gross salary or taxable salary?

Hi all,

I'm filing my taxes (using Turbotax) and it's asking me about my foreign earned income. When I look at my payslips from my UK employer, it shows a gross salary and a taxable salary for 2012. There's quite a difference between the two figures, resulting in Turbotax telling me I owe taxes for the first and not for the latter. The difference is because of benefits contributions (e.g. pension fund contribution, insurance) which come out of my gross pre-tax pay. Then there's also Employee National Insurance contribution but I don't know if this comes out of my post-tax pay or if it's taken out before tax.

Could anyone advise which salary I report? Also, even if it's my gross pay, resulting in Turbotax telling me I owe taxes because I'm above the foreign earned income exclusion (~$95K), I thought taxes in the UK are so high that I wouldn't have to pay any US taxes regardless of my pay?

If you worked in the US, you would have a 'gross pay' and a 'net pay', the difference being the deductions; this is no different.

Try using tax credits instead of earned income exclusion.

It's just like the US - you report gross. As to your pension contributions - depends on whether they're tax sheltered. If you declare them and pay tax on them, you then have a basis which reduces the amount of tax you pay on them when you start to take distributions. You can search this site for discussions about the pension contributions.