The most commonly used type of business letter is the "Block Format" in which all writing is flush against the left margin. I personally use this exclusively because it's the easiest. In this tutorial, I've tried to be pretty formal, though you may find that some things are not exactly "by the book". However, the format outlined here is very acceptable and will meet the needs of nearly any business professional.

Below are the elements to include and some additional notes. You can also view an example here Sample Business Letter.

1. Your Address: (Not needed if the letter is printed on paper on company letterhead including the address): The return address of the sender of the letter so the recipient can easily find out where to send a reply.

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2. Date: Put the date on which the letter was written in the format Month Day, Year i.e. August 30, 2003. It is typically appropriate to spell out the month instead of using a number format.

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3. Reference Line (Re): A short sentence stating the purpose of the letter.

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4. Special Mailing Notations: Such as certified mail, special delivery, airmail, etc.

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5. Inside Address: The address of the person you are writing to along with the name of the recipient, their title and company name.

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6. Salutation: Dear Ms./Mrs./Mr. Last Name:, Dear Manager of Department Name: or To Whom It May Concern: if recipient's name is unknown. Use a colon after the salutation, never a comma.

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7. Subject Line (optional): Makes it easier for the recipient to find out what the letter is about. It's a little redundant if using a reference line at the top.

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8. Body: The body is where you write the content of the letter. The paragraphs should be single spaced but double spaced between paragraphs.

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9. Complimentary Closing: This lets the reader know that you are finished with your letter. Typically Sincerely, Sincerely yours, Thank you, and so on. Note that there is a comma at the end of the closing and the first word in the closing is the only one capitalized. I often see "Yours Truly" or "Most Sincerely" which are not correct.

Skip 3-4 lines between the closing and the printed name, so that there is room for the signature.

10. Signature: The sender's signature will go in this section, usually signed in black or blue ink with a pen.

11. Printed Name: The printed version of the sender's name with his or her title or position on the line underneath it.

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12. Enclosure Notation: If the letter contains documents other than the letter itself, type the word "Enclosure." If there is more than one you would type, "Enclosures (#)" with the # being the number of other documents enclosed not including the letter itself.

13. Carbon (or courtesy) Copy Reference (cc): List the names of people (in alphabetical order) to whom you are distributing copies.

14. Reference Initials: If someone other than the sender typed the letter, include the sender's initials in capital letters followed by the typist's initials in lower case separated by a slash or a colon (for example: IR/cs or IR:cs)

Additional Notes and FAQ:
Spacing:

Do I use 2 or 1 space after a period?
The Modern Language Association says there's nothing wrong with 2, but 1 is just fine and generally more accepted

How many blank lines you add between lines that require more than one, depends on how much space is available on the page.

Font:

The most commonly used font is Times New Roman 12 pt. It is very easy to read and looks clean and simple.

Margins:

Margins should be 1 to 1.5 inches all the way around. The length of the letter will dictate which to use. For shorter letters, 1.5 is standard. For longer letters, 1 is standard. Letterhead will determine the top margin for page 1 of any letter.

Length:

Try to keep letters to one page, but follow this 2nd page format for longer letters:

1. Heading: Type the recipient's name, date and reference line from page 1, and page number.

2. Inside Address: from page 1

3. Body: skip three lines then proceed with the body of the letter and continue with the rest of the elements as listed above.
General Note:

If you don't type one of the more formal components, don't leave space for them.

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