No, you cannot make $18,000 in elective deferrals and $5,500 to each spouse's Roth IRA. The total of the deductible portion of your self-employment taxes, IRA contributions and self-employed retirement deduction cannot exceed your net profit from self employment. However, contributions to a Roth 401(k) do not reduce the amount of your income available to support the Roth RIA contributions.
TurboTax tells you that you can defer $18,000 to an individual 401(k) because the elective deferral has priority over your Roth IRA contributions. Indicating that your elective deferral to the 401(k) is $18,000 will cause most of the Roth IRA contributions to be excess contributions. TurboTax will calculate the amounts of the excess contributions and report the excess contributions on Form 5329, resulting in penalties on Form 1040 line 59.
In forms mode, examine the Keogh, SEP and SIMPLE Contribution Worksheet and the Roth IRA Contribution Limit Worksheet.
