I'm using TurboTax for my taxes (which of course are due tomorrow), and my wife's S Corp (50% owner) had a profit of roughly $14k, which they did not withdraw. It stayed in the corporate bank account, and was later used to pay down debts.
The accountant gave us a K-1 form, showing the $7k as her portion of the income. When I enter it into TurboTax it ups the tax roughly 50% of that amount. I tried testing it by changing the amount to $1000 and the tax goes up by about $500.
I really don't understand what's going on or why this is happening. She didn't even take that money home, and it's taxing it at a rate higher than anything else we pay? Any suggestions or clarifications?