I would advise you to incorporate - most likely as an S-Corp for your outside work. I would also advise you to find a good (read: SHREWD!) CPA for your tax related needs. You could learn it all yourself, but it will take you a long time to come up to speed on these matters. You can get help easy enough without spending a lot of money on their professional expertise. If you need a personal reference - I'll leave it at the bottom.
I would also encourage you to pick up one - two - or all three of these books from Nolo Press (written by Attorneys - for the rest of us!):
1 - Working for Yourself: Law and Taxes for Independent Contractors, Freelancers and Consultants (Working for Yourself, 4th Ed)
by Stephen Fishman ISBN: 0873378547. ~ $25 @ Amazon
. PLEASE - buy this one for sure!
2 - Tax Savvy for Small Business: Year-Round Tax Strategies to Save You Money (TAX SAVVY FOR SMALL BUSINESS)
by Frederick W. Daily ISBN: 0873379721 - again, about $25.
3 - Incorporate Your Business: A 50-State Legal Guide to Forming a Corporation (Incorporate Your Business, 2nd Ed)
by Anthony Mancuso ISBN: 0873379942. about $35 @ amazon. This is if you want to "do it yourself" incorporation.
Or, you can visit your local library and they may carry some/all of these.
The tax advantages can be huge depending on how your structure things and your personal needs/goals.
PS The CPA I would recommend is Glen Hughes, CPA, 615-868-2953 consulting office; www.glenhughescpa.com
. He also just happens to be a "great guy"! I receive NOTHING for recommending him - just a satisfied client.