For ease of use and setup, Quickbooks is a good choice for a small business. Most accountants can take your QB file to do your taxes. Peachtree is excellent, but takes a lot more to setup and is more expensive. It's my personal favorite for business (as MAS90 is TOO expensive). Download a trial of Quickbooks and see if it meets your needs.
I highly advise anyone who's making money on the Internet today to take a good look at the information available at reliabletaxadvice.com
I'm a single mom who's working on launching a small online baby products exchange business, and although I'm not usually one to endorse other websites, I appreciated the fact that this was the only one that didn't attempt to draw me into any type of scheme, strategy, or offshore nonsense. I'm not exactly an accounting expert, but I know enough to know that much of the "tax planning" promoted on the Internet is either illegal or ineffective (or both!).
I've found out that even if you're just making a few bucks on eBay -- or you've got a well--established online business -- you still need to know how to stay out of trouble with the IRS (audits, fines, seizure of assets, and even jail time). Anyway, it's up to you to find out if you're at risk.
Also -- can anyone recommend a user-friendly but inexpensive book-keeping software?
I've come across several that were well advertised but I'd like to get some opinions from people that have actually used this kind of stuff.