My wife has a job where she is covered by a pension, but earns about as much from a consulting business on the side. Can she deduct contributions to her traditional IRA?

Answer "YES". She is covered at work. She still may be able to deduct contributions to her traditional IRA, but the will be a function of your combined incomes. TurboTax will make the calculation for you.

If you have additional questions or details regarding this, please feel free to post in the comments for further clarification.