As a financial advisor, I recommended to a client to do a SEP IRA last year for a business he owns to help with his current high tax bracket. Him and his wife both have W2 income and one of them own a business soley with no employees and his way to avoid taxes was to continue buying new capital for the business as a write off for the business. He no longer needs to buy anything for the business.

The client only took $9,000 in income so he can only reduces his income by $2,250 if we use the SEP. If I would of told them to start a SIMPLE IRA instead he could contributed the full $9,000.

The client has not completed their taxes yet so the contribution was never claimed. Can the client just take the monies out and treat this investment as a non-qualified account (claiming losses or gains for 2022). In other words, close out the account for 2022 and treat the SEP like it never existed.

Thanks for any content any of you could provide.