turbotax program not allowing a tax strategy that IRS has allowed by law

There are no known issues. Your ability to deduct contributions may be reduced or eliminated depending on your MAGI, filing status, and whether you have a workplace retirement plan.  Let's look at the factors to make the fully allowed deductible contribution for each of you. 

• MAGI - Income of $20,000 on the NEC is the gross income. The IRA deductions look at the income available. Look at your 1040 line 11 to verify the income.
• Filing Status - covered with MFJ
• Workplace retirement plan - you must mark that your spouse is not actively participating in a retirement plan at work. There is a difference between receiving a pension versus working and contributing to your retirement plan.

Contribution allowed:

In 2024, the contribution limit for a spousal IRA is $7,000 per spouse, or $8,000 if you're 50 or older. This limit is the same as for regular IRAs. 

Side note:

Making traditional IRA contributions would reduce your income and could cause a circle, with the math trying to make sense inside the program. ROTH contributions make the most sense for you since you don't have taxable income. 

Is it $20,000 PROFIT from the business?  Were there any employer retirement plans that would reduce the amount allowed to contribute to an IRA?

Are you entering it as a "Traditional" IRA?  You mentioned a "simple" IRS, but a "SIMPLE" is a different kind of retirement plan.