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Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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What does line 9 part II IRS Form 673 mean? My annual rent

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What does line 9 part II IRS Form 673 mean?
My annual rent is 23800
My annual utilities are 6000
Total 29800
My housing allowance is 29848
The difference is -48
I don't understand line 9 saying "This is your estimated housing cost amount

Thank you for using justanswer. The purpose of the 673 form is to let your US employer know that you will qualify for the Foreign Earned Income Exception (Form 2555) and you expect that you will not owe US tax on any of the income you receive while working overseas.

Without this form, your employer would be obligated to withhold 30% on your income.

Having a negative figure on line 9 Part II just shows that none of your housing allowance would be taxable either, so again, there's no need for your employer to with 30% on your housing allowance .

Please see page 8 for more in depth information:

2012 Publication 54 - Internal Revenue Service

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