A business owned by two or more people is a partnership, even if there's no formal partnership agreement. The partnership has to file a Form 1065 partnership tax return. Part of the partnership return is a Schedule K-1 for each partner. The partnership gives of a copy of the Schedule K-1 to each partner. The partner enters the information from the Schedule K-1 in his or her personal Form 1040 tax return.
You cannot file a Form 1065 partnership return with TurboTax Home & Business. You have to use TurboTax Business, which is a different product. TurboTax Business cannot be used online. It's only available as software that you install on your Windows computer from a CD or a download.
What do you mean by "It is in my wife's name"? What is in your wife's name?
What do you mean by "still as a partnership"? You said your wife and her friend just started the business. So what is "still"? Was there a previous partnership?
