TurboTax is behaving correctly. Apparently at least one of you is covered by a workplace retirement plan and your modified AGI for the purpose of deducting a traditional IRA contribution is between $116,000 and $136,000. As your MAGI in this range changes, the deduction changes. The change in the deduction from $14,250 to $12,630 is the result of adding income to your tax return than increased your MAGI.
https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...
You'll find that your tax return includes at least one Form 8606 to report the nondeductible contribution.
It would be beneficial to recharacterize the nondeductible amount to be a Roth IRA contribution instead. Of course you won't know that actual nondeductible amount until you've completed everything else on your tax return so you need to do that before considering recharacterizing.
