Filling in 1040 - wages question...

Hello! 

Probably some dumb questions, but just trying to figure this all out!

Just adding up my wages from my payslips for line 7 on Form 1040.  Do I use my pay before tax and national insurance contributions are taken out?  Or do I use just what I take home?

Also I was automatically enrolled in my company's pension plan and a small amount is withheld from my pay every month which is matched by the company.  Do I report this in some way when I file?  Or is it not significant until it's collected when I retire?

Any help is much appreciated!! 
 

Just as in the USA, reported wages are gross, before deductions for tax, NI contributions or any pension contributions.

As far as the pension contribution match by your employer, someone else will have to jump in who knows more than I, but I believe it is not taxable until such time as you withdraw benefits. I was briefly in a employer pension scheme in the USA many years ago, and the employer contributions were not taxable income. I left that job after I was vested in the plan, but rolled everything into an IRA.

Just as in the USA, reported wages are gross, before deductions for tax, NI contributions or any pension contributions.

As far as the pension contribution match by your employer, someone else will have to jump in who knows more than I, but I believe it is not taxable until such time as you withdraw benefits. I was briefly in a employer pension scheme in the USA many years ago, and the employer contributions were not taxable income. I left that job after I was vested in the plan, but rolled everything into an IRA.

1040 Line 7 is your taxable wages. It is your gross earnings after things like tax deductible pension contributions have been taken out.

Whether your contributions to foreign pension schemes can be deducted will depend on the applicable DTA and on how you choose to treat them. the same goes for employer contributions.

Thanks vadio and nun!

nun:  what is DTA?  The pension is miniscule - a small amount (1%) is deducted from my wages and matched by my employer.  Ive no plans to do anything with it for the meantime.  Just not sure if I list my contribution & the match as income... Sorry for the questions - it's all new to me!

Under US domestic law the employer contributions are currently taxable income not qualifying for the FEIE on Form 2555.

Thanks vadio and nun!

nun:  what is DTA?  The pension is miniscule - a small amount (1%) is deducted from my wages and matched by my employer.  Ive no plans to do anything with it for the meantime.  Just not sure if I list my contribution & the match as income... Sorry for the questions - it's all new to me!

DTA is double taxation agreement.

Here is a list of the countries that have a DTA with the USA

http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z

Thanks for all of the information so far - it's been very helpful!!

Guya - where do I enter this amount?  I can't seem to figure out if its entered on the 1040 or if there is another form or schedule where I show this amount?  I'm sure its probably obvious but my eyes are crossing from trying to make heads or tales of it all!

It goes on the 1040 and the 1116 and if you need to file one on an 8938.

Cheers guya!!

You may find this interesting and informative:

http://www.londonandcapital.com/news-and-insight/thought-leadership/us-team/uk-pensions-explained-in-relation-to-us-citizens-living-in-uk.html

Cheers vadio!  Interesting read!

Under US domestic law the employer contributions are currently taxable income not qualifying for the FEIE on Form 2555.

guya, while what you say is true strictly speaking, we all know that the US-UK Treaty provides benefits in excess of those available under domestic law (if elected). I know that you're a tax professional and that you are well aware of what the Treaty says on this subject.

OP, the treaty says that pension contributions are not taxed in either the US or UK until the pension pays out. Someone from this board went to the IRS office at the US Embassy and they confirmed this interpretation (although I could not find the post when I searched for it just now).

Hi politicfool -

So I don't need to declare contributions?  It is basically peanuts - approx. £10 a month contributed by me and same amount matched by employer.  Its small change...but I just don't want to leave anything out if it needs to be included.  Just want to keep myself right... Can't make heads or tails of Form 1116.  Would love to seek advice on expat taxes but I know I would be laughed out of a tax-expert's office with my probably mind-numbingly simple situation.  Just want to understand it all and make sure I'm crossing all t's and dotting all i's! 

Correct, you exclude any contributions from the salary you report. (You're taxed when you withdraw the money from the pension later.) But it'd be a good idea to read the section of the treaty on pension schemes and understand how it operates.

guya, while what you say is true strictly speaking, we all know that the US-UK Treaty provides benefits in excess of those available under domestic law (if elected). I know that you're a tax professional and that you are well aware of what the Treaty says on this subject.

OP, the treaty says that pension contributions are not taxed in either the US or UK until the pension pays out. Someone from this board went to the IRS office at the US Embassy and they confirmed this interpretation (although I could not find the post when I searched for it just now).

I concur. One only uses or needs to use the treaty if it modifies domestic law. If one wishes to elect into the treaty (which many people do with employer sponsored pensions) one excludes employer contributions from taxable income and files a Form 8833 explaining the treaty claim.