Right. The LLC's profit-sharing contribution for your spouse is a business expense, not a self-employed retirement deduction. Note that the profit-sharing contribution must be the same base contribution rate for you and your spouse. With the maximum 25% base rate, the maximum contribution for your spouse is 25% of compensation and for you is 25% / (1 + 25%) = 20% of net-earnings from self-employment. Net earnings from self employment are net profit from self-employment minus the deductible portion of self-employment taxes. Of course because the profit-sharing contribution for your spouse reduces your net profit, it reduces the amount of the profit sharing contribution for yourself a bit (unless your net earnings exceed the $290,000 cap on the amount of income on which the calculation is made).
