In #1 above, it says, "Employee pension costs are reported on Form 1065 Line 18." Partners are not employees unless they receive a W-2. This was meant as a comparison of how pension costs are reported. If you have an amount on Line 18 and don't have employees, then you have entered the SEP contributions in the wrong place.
Yes, SEP contributions reduce the income reported to the partners (total of Schedule K). But they are not included in business expenses on page 1 of Form 1065. Be sure you have used Code R on Line 13(e)(E). The amount for Code R is repeated under Line 13(e)(O) as further information.
Per the Instructions for Form 1065, Analysis of Net Income (Loss) per Return: "Report all amounts for LLC members on the line for limited partners."
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