A couple of weeks ago I completed my federal tax return. During the process, I requested that TurboTax auto-calculate (maximize) my IRA-SEP contribution for 2022 -- I'm a sole proprietor. I've done this for a number of years without a hitch.
This year, it appears to have made a mistake (at least from what I can tell), but I didn't see it before I filed my return. Fortunately, I haven't made my SEP contribution yet.
What it did is that it calculated the maximum SEP for 2022 (I had sufficient income to max it out), but THEN it also applied the catch-up amount (an additional 6,500). And, from what I've read (https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-catch-up-contributi...) IRA-SEPs are not eligible for catch-up contributions.
I went back through the process for this in TurboTax thinking maybe I had incorrectly indicated it was a 401K (for which catch-up contributions are allowed), but no: it clearly says I'm filling out information for an SEP (I have screen shots if needed).
Now my question: why did TurboTax apply a catch-up contribution to an IRA-SEP calculation? Is this an error like I think it is?
As it stands, I think I'll need to amend my return--to show the smaller amount without the catch-up contribution. I know where on the underlying forms that TurboTax applied that, so should be trivial to reverse that part of the calculation.
But this is the first time I've run across this so wanted to double-check whether I'm confused on some point?
Thanks!
