For users that are not setup as an admin, as well as users that don't have unlimited approval authority, a deposit can only be removed by switching the contract back to draft and removing the deposit amount from the field.
This can only be done if there are change orders or invoices on the job yet
First we'll need to switch the contract to draft
Then you can change the deposit amount to $0 in the deposit box:
Once the deposit amount is set to $0 you can switch the contract back to active and the deposit invoice will be gone.
Any user that is setup as an admin of the account, or has unlimited approval authority, will be able to delete deposit invoices.
This can be processed by opening the deposit invoice, and selecting the delete option from the drop-down menu