I do something very close to what Al describes above - I use Quicken for day-to-day accounting and then export to TurboTax for tax filing. Nearly all of my employers file 10-99's now so my life is pretty much an open book if the IRS cares enough to audit me (they never have, knock on wood).

The best thing about using a Quicken-type of program is that you can put all of your income and expenses into the proper tax categories as you go instead of trying to do it all at once when the tax crunch comes. I just do a daily download of my bank accounts and assign the categories to my expense day by day. This also helps because there's a lot of everyday things I buy that are deductable; and doing my taxes is a breeze. The easiest way I've found to keep up with car expenses is that my wife and I just claim one car as 100% business use (and that's being truthful). So there's no need to keep up with mileage etc.: all expenses related to it, including depreciation, are deducted. The home office/studio deduction isn't hard to figure out - Turbotax walks you through it.

I have a business name that is registered both locally and with the state. Checks can be made to either me or the business, and the business's accounting is the same as my own. I forget what this is called for tax purposes but it's something like sole proprietership - I don't have to file separate taxes for the business.