The Your Retirement Contributions page in step-by-step mode is a mess to the point that it is entirely incomprehensible and therefore useless. I complained to TurboTax Product Quality about it for years. They corrected a few of the problems that I identified, but never got it even close to being right. I finally gave up. Ignore that page and look at the Keogh, SEP and SIMPLE Contributions Worksheet instead. In your case, your net profit is high enough that your maximum permissible total employer contribution would be 20% of net earnings and will be present on line 5 of this worksheet. While you are looking at this worksheet you can apply overrides to correct the amounts on Part III lines 9 and 17, increasing them by $500 each, and to correct the amount on Part V line 1 to match the amount on Part III line 21.
Note that a SEP plan based on Form 5305-SEP must be the only plan you have. You can only have both a 401(k) and a SEP plan if your SEP plan is based on some other prototype SEP plan agreement. Since whatever you contribute to the SEP plan reduces the amount that you are eligible to contribute to the 401(k) plan dollar for dollar, it generally doesn't make sense to have both anyway. The only benefit to having both is perhaps some greater flexibility in investment options and you can easily take distributions from the SEP plan before age 59½.
