The business will file it's own tax return - a partnership return. For that, you will need TurboTax Business, which is not the same as Home and Business. The business will file a partnership return and the business will issue each partner a K-1, as well as any other documents if any income was received by a human, from the business, that was not earned income. The partners can not file their personal returns until after the business has completed its partnership returned and issued W-2s and any other income reporting documents as appropriate. Additionally, under no circumstances will a partnership that is filing a 1065 partnership return, issue any partner or owner a 1099-MISC or W-2. All owner income will be reported on the K-1.

And I see you are posting from a Mac.  The separate Business program is not available for Mac or to do Online.  So if you need to prepare the Business return and have access to a Windows computer you can buy it here,
<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/small-business-taxes/">https://turbotax.intuit.com/small-business-taxes/...>

Good catch!

NO >>> sorry Carl but  a partnership CAN NOT, MUST NOT  pay the partners "wages" or a "salary" and will never ever issue a partner a W-2.  Only employees of a partnership are issued W-2's and partners are NOT employees.  The Partnership form 1065 will issue a K-1 to each partner which is entered on a Sch E and the partners pay SE taxes on their own personal tax returns. The partners should make their own estimated tax payments since the Partnership may not pay them for the partners.

All income to the partnership should always be reported under the partnership EIN, they must never be issued to the partners directly as that is a pain to fix.  

You need to find a qualified CPA to get this mess straightened out if you did file payroll taxes on the partners already this year. Do it now before the end of the year while you still may have time to make the corrections.

Technically the partners take distributions in lieu of a salary or wages.

Actually trying to get this all figured out for the 2016 tax year, haven't don anything yet.  Plan on getting with a CPA to make sure everything is done correctly.  Thanks for the replies

The "salary" (a set amount) for a partner is called a "guaranteed payment".  Profits over the amount of the Guaranteed Payment are also taxed as self employment income.  As Critter mentioned, it does not go on a W-2, but is part of the K-1.

A tax professional is definitely a good idea for the new business.  Doing things wrong can be costly.

I guess I'll go with just dividing the 1099 between my partner and I like a pass-through. I do not know how to get this elusive "TurboTax Business" and I don't believe it exists. If it's not online or available for my computer than I don't need it.

Since it's impossible to find "TurboTax Business" you should just fill these out by hand and mail them:
"Most LLCs with more than one member file
a partnership return, Form 1065. If you
would rather file as a corporation, Form
8832 must be submitted. No Form 8832
is needed if filing as a partnership."

@ericbintner   Did you try using Google?  It was on the very top of the list for me.
<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/small-business-taxes/">https://turbotax.intuit.com/small-business-taxes/...>

Yes. Even says use TaxAct because TurboTax Business is unavailable to me. Because I need online forms, or at least a Mac version.

Partners do not take salaries in a true partnership. they split the profit

A multi-member LLC or partnership does NOT issue W-2's to it's owners. Ever.

Our 2 member LLC includes myself as a real estate broker and my partner as a real astate agent, as 50/50 partners.  When commissions come in, we first pay commission to the external cooperating brokerage firm, then split the rest according to our broker/agent agreement (not a 50/50 split).  In real estate, brokers and agents usually receive 1099 forms.  Can we issue ourselves 1099s and pay LLC taxes on what was not distributed?  We aren't salary employees, as the work is commission based, and we're not administraive executives (like a CFO) because we are actively engaged in real estate transactions.  The broker license is in the name of the broker (a person), not the LLC.  We are located in California.