Take a look in the Windows Sound Control Panel, find the (Citronic) USB device in the Recording tab, and ensure that Windows has not enabled “boost” in its settings (it may be labelled “microphone boost”). If there is no boost setting, then just set the recording level very low.
Windows can sometimes “mess-up” the sound, so check for any [u]“enhancements”[/u]. And while you’re in the Windows Control Panel, check the levels to see if you can reduce the recording level there independent from the Audacity recording volume control.
Also, try a different Audio Host (the box to the left of the recording level control in Audacity) to see if that makes any difference.
If you’re getting good recordings with the “inconvenient” level settings, you may be able to live with it. But, if the analog-to-digital converter in your interface is being clipped, reducing the level digitally won’t remove the distortion.
It would appear that your device has a gain control, but apparently it doesn’t have any effect on the phono setting. (ART makes a [u]USB turntable interface[/u] with an analog gain control.)
None of that helped. The settings couldn’t be changed. However, I have since bought a new laptop (Windows 10) and don;t have the problem at all. Not ony that, but recording quality is significantly better using the same turntable and preamp,