You must attach Form 2555, Foreign Earned Income, to your Form 1040 or 1040X to claim the foreign earned income exclusion, the foreign housing exclusion or the foreign housing deduction. Do not submit Form 2555 by itself.
Form 2555 shows how you qualify for the bona fide residence test or physical presence test, how much of your foreign earned income is excluded, and how to figure the amount of your allowable foreign housing exclusion or deduction. If you claim the exclusion(s) and/or deduction under the bona fide residence test, be sure to enter the type of visa under which you entered the foreign country and the period of your bona fide residence in Part II. Frequently, these items are overlooked.
If you claim the exclusion(s) and/or deduction under the physical presence test, be sure to insert the beginning and ending dates of your 12-month qualifying period(s) and the dates of your arrivals and departures, as requested in the travel schedule in Part III. If you need more space, attach an additional page or statement.
You must fill out Part VI if you are claiming a foreign housing exclusion or deduction. If you are claiming the foreign earned income exclusion, fill out Part VII. If you are claiming the foreign earned income exclusion, the foreign housing exclusion, or both, fill out Part VIII. Finally, if you are claiming the foreign housing deduction, fill out Part IX.
If you and your spouse both qualify to claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you and your spouse must file separate Forms 2555 to claim these benefits.
Form 673 - Reduce Your Withholding
Your employer is not required to withhold U.S. income tax from the portion of your wages earned abroad that is equal to the foreign earned income exclusion and foreign housing exclusion if your employer has good reason to believe that you will qualify for these exclusions.
You can give a statement to your employer indicating that you will meet either the bona fide residence test or the physical presence test and indicating your estimated housing cost exclusion.
Form 673, Statement for Claiming Exemption from Withholding on Foreign Earned Income Eligible for the Exclusions Provided by Section 911, is an acceptable statement. You can use Form 673 only if you are a U.S. citizen. U.S. resident aliens are not allowed to file Form 673. You do not have to use the form. You can prepare your own statement.
Give the statement to your employer and not to the IRS.
For additional information, refer to the Income Tax Withholding section in Chapter 2 of Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.