For the purpose of determining the maximum contribution to a self-employed retirement plan, net profit is not reduced by the deduction for self-employed health insurance. It's instead the other way around, the deduction for self-employed health insurance cannot be more than the net earnings that remain after subtracting the self-employed retirement deduction.
TurboTax will not prevent you from entering an excess self-employed retirement contribution, but it will limit the deduction to the permissible maximum deductible amount. Any contribution beyond the permissible maximum contribution amount is subject to a 10% penalty on Form 5330. TurboTax does not support Form 5330. You'll want to examine the results on the Keogh, SEP and SIMPLE Contribution Worksheet to make sure that your contributions do not exceed the permissible amount.
