I need your comments on this as i got a billing notice for disallowed self employment tax deduction:
From 2023 TurboTax filing, my net income from sh C is 188536.
I had $35,216 as ER contribution, $22,500 as EE contribution and $7500 catchup contribution in my solo 401k for a total of $65216, which well below the 73,500 maximum contribution allow so i contributed $7500 for myself and $7500 for my non-working spouse to traditional ira, still below the maximum contribution allow.
Now IRS, told me that $15,000 traditional ira contributions were not allowed. This is the reason as IRS stated:
” we did not allow the amount claimed as a deduction for self-employed SEP, SIMPLE, and qualified plans on your tax return. Your employer has already adjusted Box 1 of your Form W-2 to exclude this amount”
I no W-2 form nor W-2 wages reported on my 2023 1040 tax return.
What IRS meant and is it correct to disallow this traditional ira contribution ?
please advise.
