If I open an individual 401K can I put all my profits of the business in it and deduct it as an above the line deduction and reduce my AGI? The profits will be $5000.

<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/one-participant-401k-plans">https://www.irs.gov/retirement-plans/one-participant-401k-plans</a>

No.   However, if you do not make elective deferrals (employee contributions) to your regular employer retirement plan, you can open a solo 401 (k) plan and contribute your net profit from self-employment minus half your self-employment tax.  This deduction is reported on Line 28 of Form 1040, and has no impact on your self-employment tax.

If you do make elective deferrals (employee contributions) to your employer plan, the maximum of your elective deferrals across all such plans is $18,000 ($24,000 if you are over age 50).  Your profit-sharing contribution on the solo 401 (k) is unaffected by this.

I no longer have an employer’s 401k and I received a large amount of severance pay without that money going into the 401K.  So if I contributed $5000 to a solo 401k I believe that should come off my income minus the ½ self-employment tax? The goal is to reduce my AGI.

You can't contribute the full $5,000.  You can contribute $5,000 minus half your self-employment tax, assuming you made no contributions to the employer 401 (k) in 2017.  It will reduce your AGI.  I also am assuming you are not planning to take a self-employed health insurance deduction in 2017, as that also reduces the amount you can contribute to a solo 401 (k).  The total of Lines 27, 28, and 29 on Form 1040 can total no more than your net profit from self-employment.