IRS Form 673

IRS Form 673, "Statement for Claiming Exemption from Withholding on Foreign Earned Income Eligible for the Exclusion(s) Provided by Section 911," is a crucial document for U.S. citizens and resident aliens who work abroad. This form allows eligible individuals to claim an exemption from withholding on foreign earned income, making it a vital tool for expatriates aiming to optimize their tax situation.

IRS Form 673 is primarily for U.S. citizens and resident aliens living and working outside the United States who qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction under section 911 of the Internal Revenue Code. To be eligible, one must meet either the bona fide residence test or the physical presence test.

• Reduction in Tax Withholding: By filing IRS Form 673, individuals can reduce or eliminate U.S. federal income tax withholding on their foreign earned income.
• Increased Take-Home Pay: With less tax withheld, expatriates can enjoy a higher take-home pay, providing more immediate financial benefits while living abroad.
• Simplified Tax Compliance: Filing this form helps streamline tax compliance for U.S. citizens and resident aliens working abroad, ensuring they maximize their available tax benefits.

• Personal Information: Enter your name, social security number, and address.
• Foreign Earned Income: Provide details about your foreign earned income, including the amount and the nature of your work.
• Statement of Exemption: Sign and date the form, confirming that you meet the requirements for the foreign earned income exclusion.
  

To file IRS Form 673, you need to submit it to your employer, not the IRS. Your employer will use this information to determine the appropriate amount of federal income tax to withhold from your paycheck. It's essential to keep a copy of the form for your records.