Partnership or Schedule C

As far as taxes are concerned you have a partnership, whether or not you formalized it or made it official. You have to file it as a partnership. You and your partner should meet with a local accountant or tax professional to make sure you file your taxes correctly for 2022, and to get advice on how to handle the accounting and taxes for your partnership going forward.

I was told that I will not be able to claim more than $5,000 of expenses this year, they all have to be amortized over a long period.

That is true, and not just for a partnership either. On top of that, if your first year earnings are over a certain threshold, (50K I think) then the amount you can deduct in the first year is reduced. But any amount over that is just amortized (not capitalized) and deducted (not depreciated) over the next 15 years. (which is not a long period). 

If you sell, close or otherwise dispose of the business before the 15 years is up, then any remaining amount is fully deducted in the last year of business.

You really should seek the services of a CPA/Accountant for at least your first year of business. Expecially if your state also taxes personal income. Doing it wrong can (and will) be costly down the road. I've seen/heard about my fair share of businesses going bankrupt before they even get off the ground, all because of fines, penalties and back taxes for having done things wrong from the beginning. Makes the cost of professional help in that first year seem like a pittance in comparison. Please seek professional help for at least the first year.

A partnership is a partnership, even if it is not registered officially with a government body.  You need to file a form 1065 partnership return.  The due date is March 15, not April 15, and the penalty for late filing is $195 per month per partner.

To use Turbotax, you would need to use the Business version which is only available as a download or CD for PC, there is no online or Mac version.  When you prepare the 1065 you will create a K-1 statement for each partner that is added to your personal tax return along with any other income and deductions, that you can file with one of the personal versions of Turbotax.

However, it would be wise to see a professional for the first year.

My recollection of startup costs is that if less than $5000 you can expense them, if more than $5000 you can expense part and amortize part, according to a formula that I don't have handy.  And any of your startup costs that are assets (equipment, etc.) is depreciated in one of the normal ways rather than being counted as part of the startup costs.  But again, see an expert for your first year. 

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@andreeank wrote:

I was told that I will not be able to claim more than $5,000 of expenses this year, they all have to be amortized over a long period.

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That would be true if the expenses incurred were startup costs, but not if the expenses were incurred after the business was operational (i.e., after the partnership was open for business).

Startup costs are all eligible costs incurred before beginning to operate the business.

See https://www.irs.gov/newsroom/heres-how-businesses-can-deduct-startup-costs-from-their-federal-taxes

[Note that the difference between business assets that must be capitalized and business expenses]

see a pro to make sure the first year's return is filed properly. what someone told you was by someone that does not know the tax laws. if the first year's return is messed up that will create problems for future returns.  it is unlikely you extended the partnership return which is now 8 months late - about a $1600 penalty/per partner.  after the business has started there is no limit on the amount of current operating expenses that can be deducted even if they create a loss. however, the method of accounting (cash vs accrual) affects when the deduction can be taken. cash basis - only actual expenses paid during the tax year but if you put business expenses on a business credit card then the year they're put on the card is the year they're deductible.

accrual basis expenses are normally deductible in the year incurred but there can be other rules affecting deductibility.  

what that person was alluding to, incorrectly,  is start-up expenses - expenses incurred before the business actually starts.  there are no hard rules to when a business starts it could e when the doors open, clients are actively sought, or your website goes live. (these are not all-inclusive) 

the rules deducting start-up expenses if so elected

1) less than $5000.01 the actual amount

2) $5000.01 to $50,000.00  - $5000 deductible year business starts the excess amortized over 180 months

3) over $50000.00 - reduce the $5000.00 by the excess over $50,000.00 but not below zero. the rest gets amortized over 180 months

you need a tax pro that clearly knows the difference between start-up expenses and ongoing operating expenses.