The calculation of the maximum employer contribution is complicated. Your maximum possible employer contribution is 20% (not 25%) of net earnings from self-employment, but could be less depending on the amount of net earnings. Net earnings are net profit minus the deductible portion of self-employment taxes.
See the Keogh, SEP and SIMPLE Contribution Worksheet for the details of the calculation. Unless your plan permits after-tax contributions (which would not reduce your tax liability), you are not permitted to contribute more than the maximum deductible amount. If you contribute a greater employer contribution than permitted, it's subject to a 10% additional tax on Form 5330 (not support by TurboTax) every year until the excess is resolved.
Deductible contributions reduce the amount on which your tax liability is calculated. It does not provide a 1-to-1 reduction in tax liability.
You can use TurboTax's Maximize box for an individual 401(k) to find the maximum combined employee elective deferral and employer contribution.
