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@HOPE2 wrote:

Hi@itonewbie.his wife is living the other country and does not have SSN so should file paper( reason )

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Even if the NRA wife is not eligible for SSN, she can always apply for an ITIN (if they decide to file jointly).  If they wish to file MFJ, you should help your clients carefully consider the downstream implications whether it is wise to do so.  And if they decide that the husband should file separately, he can still e-file MFS without the NRA wife needing an SSN or ITIN.

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he was in TURKEY for 5 month and he worked as self-employed and money wired in his account in the U.S.

In total he stayed in MA for 7 months.

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If he relocated to Turkey after spending 7 months in the US, his eligibility for FEIE would depend on a number of factors such as the intent and duration of his stay in Turkey.  Questions that need to be raised would include the amount of time he will spend in the US after his move both for business and personal purposes.

Whether the money he earns is remitted back to the US is irrelevant.  However, there could be considerations for QBU (depending on how his books and records are kept) and foreign currency gains.

With him running his own business, it will be important to also assess the classification of his business for US tax purposes (regardless of how Turkey may treat it) because those rules work differently for foreign entities.  The classification will then drive his tax and information reporting requirements in the US.

You will have more than a handful to deal with if it's considered a Controlled Foreign Corporation (CFC).  Even something as mundane as a disregarded entity will have its information return filing requirements for F.8858 beyond Sch C.

On top of all these, foreign pension, PFIC, etc. may need to be taken into account, not to mention the wife's employment income, which would come with a different set of considerations such as nonqualified deferred compensation and, again, common foreign pension.

All these are high risk, high exposure items, if not done right.

At the end of the day, his intent and actions along with a complex set of common law considerations could determine whether he remains a domiciliary resident of MA and, therefore, taxable in MA after his move.