The reason TurboTax is not showing the full contribution is due to how they were made.
In 2024, she put $30k into the Employee side. Because she didn't use a ROTH, that entire $30k was deductible. This year, by putting $20k into a Roth, she used up her contribution space with money that doesn't provide a tax deduction today.
Additionally, as a sole proprietor, Your employer contribution is limited to 20% of your "Net Earnings from Self-Employment".
If you want to see the IRS's exact math, you can view the Self-Employed Deduction Worksheet in TurboTax. It will show you the step-by-step subtraction of the Self-Employment (SE) tax and the 20% calculation that led to that reduced figure.
Since TurboTax is only accepting a reduced amount as the legal limit, if she deposited the full amount, she may have an excess contribution.
Check if that extra amount should be removed from the account to avoid an IRS penalty for over-contributing.
If you do have an over-contribution, contact your financial institution and ask for a return of excess contribution for that extra amount.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
