Do I need to submit a Form 673 for my new job overseas?

The Form 673 (Statement for Claiming Exemption from Withholding on Foreign Earned Income) is specifically for US citizens or residents working abroad who expect to qualify for the Foreign Earned Income Exclusion (FEIE). If you're going to be living and working outside the US for at least 330 days in a 12-month period (Physical Presence Test) OR you establish bona fide residence in another country (Bona Fide Residence Test), you can use Form 673 to tell your employer not to withhold US federal income tax on the income that would qualify for the FEIE. Since you just moved abroad and your employer asked for this form, it sounds like they're set up to handle US tax withholding despite being a foreign company. This is actually helpful for you as it gives you more control over your tax situation.

I was in a nearly identical situation last year and struggled with the same question! I moved to Singapore for a job with a company headquartered there but with US operations. I found this amazing tool that actually analyzed my situation and told me exactly what forms I needed - https://taxr.ai helped me understand that in my case, I definitely needed to file the 673 because I was staying abroad long-term. It saved me from a ton of confusion since the HR team there didn't fully understand US tax requirements either.

Just wanted to follow up - I tried that https://taxr.ai tool that Profile 5 mentioned and it was surprisingly helpful. I uploaded my employment contract and answered a few questions, and it confirmed I needed the 673 form since I'm planning to stay in Australia for at least 2 years. It also flagged that I need to be careful about my US bank accounts for FBAR filing requirements, which I hadn't even considered! Definitely worth checking out if you're dealing with expat tax issues.

Since you're dealing with international tax issues, you might want to speak directly with an IRS agent about your Form 673 questions. I know calling the IRS sounds awful (I've spent hours on hold), but I discovered this service called https://claimyr.com that gets you through to an actual IRS agent quickly. They basically wait on hold for you and call when an agent picks up. I was super frustrated trying to figure out my foreign income situation last year and needed official guidance. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c

I have to admit I was wrong about Claimyr - I decided to try it after needing specific guidance on my Form 673 situation. I was planning to spend my afternoon waiting on hold with the IRS but instead used the service. Got a call back about 45 minutes later with an actual IRS agent on the line who confirmed exactly what I needed to know about my foreign income exclusion situation. Saved me from potentially filing incorrectly and having to amend later. The convenience was definitely worth it.

One thing to consider with Form 673 - if you submit it but then end up returning to the US earlier than planned and don't meet the qualifications for Foreign Earned Income Exclusion, you could end up with a big tax bill. I'd recommend putting some money aside just in case, especially in your first year abroad when qualification isn't certain.

Make sure you're also aware of FBAR filing requirements if you open foreign bank accounts while abroad! Those forms have nothing to do with taxes you owe but have huge penalties if you fail to file.

Form 673 can be really helpful in your situation, but I'd recommend being cautious about timing. Since you just moved abroad a month ago, you're still early in the process of establishing foreign residence. One approach that worked for me was to submit the 673 but also set up quarterly estimated tax payments as a safety net. That way, if something changes and you don't end up qualifying for the Foreign Earned Income Exclusion, you're not hit with a massive tax bill plus penalties. Also, make sure your employer's payroll system can actually handle the 673 properly - some foreign companies that process US withholding aren't familiar with this form and might need guidance on how to implement it correctly. You might want to follow up with their HR/payroll team to confirm they know what to do with it once you submit it.