Great, you are doing it right, by asking about things BEFORE the business gets too far. Most people wait way too long, and things can be difficult or impossible to correct 'after-the-fact'.
I suggest going to a tax professional for a "consultation" to learn how to set things up and to analyze what may be best for your SPECIFIC situation for BOTH Partners. Perhaps a Partnership is best, but perhaps some other form (such as an S-corporation) could be better. Make sure the tax professional is experiences with Partnership AND Corporation returns. If it is decided to be a Partnership, you should write up a "Partnership Agreement" to clarify as much as possible between the two partners, as well as other things. If the business is simple, the tax professional may be able to give you tips for what to do. If it is more complex, it would be best to go to a business lawyer for help for that.
I also suggest having the tax professional do the business return for AT LEAST the first year. As Hal_Al mentioned, the Partnership return (or Corporation) is a completely separate tax return, and then the K-1s (and W-2s if it is a Corporation) from that go on your personal tax return.
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