Completely lost - Filing tax return for 2007

I'm writing this on behalf of my husband because he doesn't "do" the internet and we're both totally confused.

Are we right in thinking he has to file the 1040 and 2555ez to exclude foreign earned income for 2007?

He lived in the UK for the whole of 2007 and doesn't have any financial ties or assets back in the US such as savings, a home etc whatsoever. 

I assume the $ equivalent of his UK income goes in as a postive on line 7 on the 1040?  Is that net or gross amount?  Also someone said to him that on line 21 the same amount as entered on line 7 goes in as a negative.  However line 21 is "other income" so I don't see why this would be entered in this way :/  Apparently it's to make a zero by the end of the page ??  This is the part that is confusing me the most.

Also I know the tax deadline for overseas folks is June 16th, can they be postmarked on June 16th or do they have to get there by June 16th?  I assume we will be sending them to the Austin Service Centre.  I've heard a lot of people mention filing with the Embassy in London, can this only be done in person or can you send it there too?

Sorry if all these questions sound completely dense but i've never even seen one of these forms before and my husband always got a professional to prepare his taxes previously.  Is there anywhere we can do this online that takes into account the need to file the 2555 also?

Ok.. I think i've worked out the line 7/line 21 thing.  Does the excluded income from the 2555 count as "other income" for line 21 so it cancels out the amount of line 7? 

I'm so glad I don't have to do this every year!! 

Are you sure its June 16th?  I thought it was later than that?

I thought US citizens that lived abroad got a 2 month filing extension from April so I just assumed it was June 16th, I could be wrong!

I think June 16th is right for the automatic extension. You can get a further one, but you have to file a form to get it.

What you've written regarding lines 7 and 21 sounds right. You can write in '2555 EZ' on the line next to 21, and then just write the number in parentheses to show that it is negative (this is how they did it on a sample form in the instructions, so I just followed it).

I'm pretty sure you can send it to the embassy London. In fact, when I took mine in person, the woman gave me a sheet about this, and said they were encouraging people to send them to the office instead of coming in person. Unfortunately i don't have that sheet here, but try the FAQ on their website...it's pretty useful.

I just fill out my taxes by hand, as they're relatively straightforward. I haven't been able to use e-file through the IRS, because it won't let you enter 'non-resident alien' for your spouse, and insists upon a SSN or ITIN. I think some people use Turbo Tax and other programs, but I prefer to go with the free method.

ETA: Here is the link to the FAQ http://www.usembassy.org.uk/irs/irsfaq.htm. You can send them to either Austin or London.

Thanks for the advice, I think we know what we're doing now!

(waving the SOS Flag!)............My husband was 'suppose' to be taking care of our taxes, and now suddenly he throws hands up  -  and I'm picking up pieces.
I'm US citizen, he's UK. we moved here via my IBM job transfer (me on 'marriage visa') in Feb 2007 with loads of kids in tow.  We now must file 2 years of UK taxes (Jan-April '07 for the UK 2006 tax year, and April '07-'08 for 2007 tax year) then submit that with our 2007 US Tax filing showing our earned income.  we live off just my ibm job, and have maybe a few deductions (scrambling to find them).  I've tried to pour through the email thread to figure out forms we need to fill out, but not sure.  Two questions:
   1) Does anyone know for sure what form we submit? 1040 or 2555EZ...if not then will phone embassy.
   2) Can anyone suggest good US/UK accountant (in Surrey area?) I can just hand this mess to and not worry about (since hubby can't deal with it and I'm swamped with day-job, children, launching new start-up biz this month!!). 
   We have accountant in Asheville who will then file our US tax returns (according to my husband), but thinking maybe a good US/UK accountant here can just 'do it all'. (we never claimed our moving expenses, we own land over in Asheville, and we have loads of tax issues from US 2006 year to debate due to being katrina evacuee's....so need someone patient & highly qualified!).

Any and all responses are Greatly appreciated.
Lou b. Southern