What to do for when a character thinks?
I am of course writing a novel and I am having some problems with characters thought.
What if there are two characters in the scene having thoughts?
Do I carry on putting their thoughts in italics?
Also, could you explain the internal dialogue of when to use quotes (if needed) and the italics?
The first challenge I see you having is narrative mode.
Normally, one chooses one character and writes the scene from his/her point of view. In that case, the reader can only be privy to the thoughts of your POV character. The POV character can infer another character's thoughts from their words and actions, but cannot actually know them. He/she could easily misread the other character.
If you want to include both characters' thoughts, you can do so with an omniscient narrator, but it's a less popular choice today. You would have to write in such a way that the readers understand they are looking at
the characters rather than standing in the shoes of any one character.
As for putting thoughts in italics vs. quotation marks... most writers prefer italics because the practice distinguishes thought from speech. It makes clear that the character is not speaking these thoughts aloud.
However, it is possible to write a character's thoughts in such a way that the reader can clearly understand they are thoughts even without the italics. This is much easier if you are writing in a limited first or third person mode rather than omniscient.
If you don't need the italics, or quotation marks, or any other typographic device to make it clear to the reader what is going on, then you can leave it out. Some readers find excess typography distracting.
Of course, what is distracting to one reader may be clarifying to another. You have to know your reader. But the rule of thumb is that you should try to maximize the "signal to noise" ratio in your writing.
(Signal = a story clearly told; noise = distraction.)