@Tr221 wrote:
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”
This statement doesn't make sense. The $15,000 of IRA contributions and the solo 401(k) contributions are separate things. With $188,536 of net profit from self-employment, these contributions are certainly allowed. However, if your modified AGI for the purpose was over $136,000, your traditional IRA contribution (and your spouse's contribution if your spouse is covered by a workplace retirement plan) was not deductible. If your spouse was not covered by a workplace retirement plan and MAGI was over $228,000 in 2023, your spouse's traditional IRA contribution was not deductible. Nondeductible IRA contributions are required to be reported on Form 8606 Part I.
This seems to be an error made by the IRS. You'll need to address it with them. It makes no sense that they would mention anything about a W-2 if you received no W-2, which should be apparent to the IRS. It seems that you made the correct entries into TurboTax and TurboTax would have produced a correct tax return with respect to these contributions.
