Why is Turbotax reducing my IRA contributions? My wife and I both contributed the full $8,000 amount, yet Turbotax reduced mine to $4,250.

[AnnetteB6]

Take a closer look at the messaging on the screen.  TurboTax is probably telling you that of your $8000 contribution, only $4250 may be deductible if you contributed to a Traditional IRA.  

If you contributed to a Roth IRA, then your contribution may be limited by your Modified Adjusted Gross Income and you may have an excess contribution.  

[Charbear]

Thank you. To clarify, these were both max contributions to a traditional IRA for each half of a married couple filing jointly. We did not contribute to a Roth IRA. This is the exact same scenario we have done for many years, with no changes. Yet, this is the first time I recall ever seeing a notification like that in TurboTax. If I remember correctly from prior years, 100% of each of our maximum contributions was tax deductible. Color me still confused. Thanks!

[fanfare]

If your income goes up, you creep into the phaseout zone where some and then all of your deduction is denied.

return of excess contribution:

before tax filing date including extension: positive earnings allocable to the excess are included in income on 1040 Line 4b for the year of the contribution. negative earnings are ignored; in any case, for purposes of basis, consider the original contribution amount as returned.
["Include the earnings in income for the year in which you made the contributions, not the year in
which you withdraw them."]

You must have a) filed by tax day, or b) requested an extension of time to file by tax day to take advantage of the Oct 15 deadline.

positive earnings removed are no longer penalized 10% if you are under age 59 1/2. (eliminated in 2023)
Consult your custodian to obtain the correct removal form for :excess plus earnings".
---
You can't resolve the excess prior to the tax return due date without the custodian's help. your action generates a 1099-R and can be a problem next year if you do it yourself.