Contents Important Changes for 1999  ............. 1 Important Reminders  ......................... 2 Introduction  ........................................ 2 1.   Filing Information  .......................... 2 Filing Requirements  ........................ 3 Nonresident Spouse Treated as a Resident ................................... 5 Estimated Tax  ................................. 6 Information Returns and Reports  ... 6 2.   Withholding Tax   ........................... 7 Withholding   .................................... 7 30% Flat Rate Withholding  ............. 8 Social Security and Medicare Taxes 8 3.   Self-Employment Tax  .................... 10 Who Must Pay Self-Employment Tax? ......................................... 10 Exemption From Social Security and Medicare Taxes  ....................... 11 4.   Foreign Earned Income and Housing: Exclusion-Deduction  .. 11 Who Qualifies for the Exclusions and the Deduction?  ................. 11 Requirements .................................. 11 Foreign Earned Income Exclusion  . 18 Foreign Housing Exclusion or Deduction ................................. 20 Form 2555 and Form 2555–EZ  ...... 21 5.   Exemptions, Deductions, and Credits  .......................................... 27 Exclusion vs. Deduction  ................. 27 Exemptions ..................................... 27 Contributions ................................... 27 Moving Expenses  ........................... 27 Individual Retirement Arrangements 29 Taxes of Foreign Countries and U.S. Possessions ............................. 29 How To Report Deductions  ............ 30 6.   Tax Treaty Benefits  ....................... 31 The Purpose of Tax Treaties .......... 31 Common Benefits  ........................... 31 Competent Authority Assistance  .... 32 Obtaining Copies of Tax Treaties ... 32 7.   How To Get More Information  ..... 32 Services Available Only Outside the United States  ........................... 33 Taxpayer Advocate Services  .......... 33 Questions and Answers  .................... 35 Index  .................................................... 41 Important Changes for 1999 Foreign    earned    income    exclusion    in- creased. For 1999, the maximum amount of foreign earned income that you may be able to exclude from your U.S. gross income has increased to $74,000. Photographs   of   missing   children.      The Internal Revenue Service is a proud partner with the National Center for Missing and Ex- ploited   Children.   Photographs   of   missing Department of the Treasury Internal Revenue Service Publication 54 Cat. No. 14999E Tax Guide for U.S. Citizens and Resident Aliens Abroad For use in preparing 1999  Returns