Schedule K-1: Ordinary business income

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As a shareholder in an S-corp, I received a K-1 form that is being included in my personal tax return. The Ordinary Business Income (box 1) appears to be the profit for the business for the given year.

Upon entering all information, it later shows Ordinary Business Income as taxable personal earned income. This was business profits. Not salary or even distribution. 

Why is this the case? Am I doing something wrong?