I am going to tell you what you must do legally. Although, I suspect you may not be interested in following these instructions if you are already trying to hide your partners income.
When you have a partnership with someone who is not your spouse, the partnership is required to report all of its income and expenses on a partnership tax return called a form 1065. When you prepare the form 1065 for the partnership, it will include a K-1 statement for each of the partners. Each partner includes the K-1 statement on their personal tax return. The K-1 statement shows each partner’s share of the partnership’s income and expenses, and are added to the partner‘s other income, deductions, and credits to create their final tax return. The partnership income is not necessarily divided 50-50, it depends on your agreement between the partners and how much work each partner does for the partnership.
The partnership return form 1065 can only be prepared with TurboTax Business, which is a separate program from the self-employment version, and is only available as a download or CD to install on a PC; there is no Mac or online version. The partnership return is due March 15, not April 15, and the penalty for late filing is $195 per month per partner.
