They both *could* be deductible; it depends on the income level.

Marking the SEP box means "covered by an employer" retirement plan (yeah, I know it's a Sch C...but that's the same thing in IRS speak). 

When covered by an employer plan, contributions to IRA's may be limited or even eliminated.

YOU need to run numbers both ways to determine the largest benefit.  Sometimes forgoing the SEP to be able to contribute the max to a Traditional IRA is the best option.