Is your wife an employee of your (not her) sole proprietorship? Only SEP contributions that a sole proprietorship makes for employees to whom the sole proprietorship issues a W-2 are reportable on Schedule C. If your wife does not receive a W-2 from your business, you've been reporting her SEP contributions incorrectly
If your wife is a sole proprietor, including if your business is an unincorporated husband-and-wife business, her share of the business must be reported on a her own Schedule C and her SEP contribution must be shown on Form 1040 line 28, not on her Schedule C.
