Yes, your wife would be eligible for a deduction on her Schedule C for her retirement contribution, although there are qualifications and income limitations.
She should enter all her self-employment income and expenses before entering her SEP IRA contribution, including the deductible part of self-employment tax.
Type 'sep ira' in the FIND window, and 'Jump to sep ira'.
Here's more detailed info:
https://ttlc.intuit.com/replies/6765436