TurboTax does nor support the calculation of the maximum permissible solo 401(k) contribution when the individual also contributes to another employer-sponsored plan. The individual must do their own calculation to ensure that the maximum permissible total employee contribution to all 401(k) plans for the year is not exceeded.
You are correct, Because your spouse is already made the maximum permissible total elective deferral to the employer-sponsored 401(k), your spouse can only make the employer contribution to a solo 401(k), no employee elective deferral. Since the employer contribution to the solo 401(k) would be the same as the employer contribution to a SEP IRA, it would probably make more sense for your spouse to to just establish a SEP plan rather than a solo 401(k) plan. Opportunities for distributions from a SEP IRA are generally less restricted that for distributions from a 401(k). Even if your spouse established a solo 401(k) and made the employer contribution from self-employment income to that plan rather than to a SEP-IRA, your spouse would have to use the Maximize function for a SEP plan or a Profit Sharing Keogh plan so that TurboTax would not mistakenly calculate any employee elective deferral to that plan. with net income of $4,500 and the deductible portion of SE tax being $500, the maximum contribution would be $800, all employer contribution.
