How do I cite a paper that is not yet submitted for publication?
You can call it a "preprint" if it is ready to circulate, or say that it is "in preparation" if you are working on it but it's not done yet.  (The difference is whether you would be willing to give interested people a copy now, or whether you would ask them to wait until it's done.)

Don't call it "submitted" if that's not actually true, even if you think it will be submitted by the time anyone sees the reference.  Getting caught in even a minor lie can hurt your reputation for honesty, and there are any number of ways something could go wrong in the process of finishing and submitting the paper.