Introduction This publication discusses the special tax rules for U.S. citizensand resident aliens who work abroad or who have income earned inforeign countries. As a U.S. citizen or resident alien, your worldwideincome generally is subject to U.S. income tax, regardless of whereyou are living. Also, you are subject to the same income tax filingrequirements that apply to U.S. citizens or residents living in theUnited States. Filing information.Chapter 1contains general filing information, such as: Whether you must file a U.S. tax return, When and where to file your return, How to report your income if it is paid in foreign currency, How to determine your filing status if your spouse is anonresident alien, and Whether you must pay estimated tax. If you own stock in a foreign corporation or have an interestin a foreign partnership, you may have to file information returns.See the instructions under Information Returns and Reportsin chapter 1. Withholding tax.Chapter 2discusses the withholding of income taxes and socialsecurity and Medicare taxes from the pay of U.S. citizens, residentaliens, and nonresident aliens. It will help you determine if thecorrect amounts of taxes are being withheld and how to adjust yourwithholding if too much or too little is being withheld. Self-employment tax.If you are self-employed, you generally are required to payself-employment tax. Chapter 3discusses who must pay self-employmenttax and who may be exempt from self-employment tax. Foreign earned income exclusion and housing exclusion anddeduction.There are income tax benefits that might apply if you meet certainrequirements while living abroad. You may qualify to treat up to$74,000 of your income as not taxable by the United States. You mayalso be able to either deduct part of your housing expenses from yourtaxable income or treat a limited amount of income used for housingexpenses as not taxable by the United States. These benefits arecalled the foreign earned income exclusion and the foreign housingdeduction and exclusion. To qualify for either of the exclusions or the deduction, you musthave a tax home in a foreign country and earn income from personalservices performed in a foreign country. These rules are explained inchapter 4. If you are going to exclude or deduct your income as discussedabove, you must file Form 2555 or Form 2555-EZ. You will find anexample with filled-in Forms 2555 and 2555-EZ in thispublication. Exemptions, deductions and credits.If you are a U.S. citizen or resident alien living outside theUnited States, you are generally allowed the same exemptions,deductions and credits as those living in the United States. However,if you choose to exclude foreign earned income or housing amounts, youcannot deduct or exclude any item or take a credit for any item thatis related to the amounts you exclude. Among the topics discussed inchapter 5are: Exemptions you can claim, Contributions you can deduct, Moving expenses you can deduct, and Foreign taxes you can either deduct or take a creditfor. Tax treaty benefits.Chapter 6discusses some benefits that are common to most taxtreaties and explains how to get help if you think you are not gettinga benefit to which you are entitled. It also explains how to getcopies of tax treaties. How to get more information.Chapter 7is an explanation of how to get information (includingforms and publications) and assistance from the IRS. Questions and answers.Answers to frequently asked questions are presented in the back ofthe publication.