I was deployed over seas and the only income I made was my military salary does that apply to making money outside the u.s or do they mean from external sources?

[SteamTrain]

You are correct, that only applies to $$ from actual foreign sources while living overseas.

Your military W-2 is just treated as-if earned in the US.   

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IF deployment was in an actual combat zone, then your box 1 would be reduced by (at least) your combat pay that would be in box 12 of the W-2 with a code Q.....but there can be a few other things that reduce box 1 too.  TTX handles them, you just enter your W-2 in the software with all the boxes you see on the paper form.