Most likely - you was told about a foreign earned income exclusion.
An US person living abroad - you may claim a foreign earned income exclusion.
The person may qualify for the foreign earned income exclusion - he/she should: -- Work and reside in a foreign country for at least 330 days during the year, or -- Meet either the Bona Fide or Physical Presence tests.If the person qualifies, he/she may exclude up to $91,400 (2009 in foreign wages -- plus housing allowances (limited to 30% of the earned income exclusion).
To receive that exclusion - the taxpayer should file either form 2555 or 2555EZ.
Here are forms you likely need:
Please be aware that - the exclusion above will not affect self-employment taxes - only income taxes. Only earned income is excludable. For instance dividends, investment income, etc - are not excludable.
If your situation being on the cruise line - is not the same as being in the foreign country - and unfortunately - you may not use a foreign earned income exclusion.
Let me know if you need any help.