<prompt> Human: Recently my Wifes small crafts business on Etsy has blown up and she is making more money than she ever expected. I am afraid of the tax implications and would like to make sure I am doing everything legit. Please let me know what I can do to legitimize my business and make sure Uncle Sam doesnt come knocking.  <response>: First, your wife should get an EIN to use instead of her personal SSN.Second, if you havent already, you should open a new and separate bank account where all your wifes earnings and all her business related expenses come out of. This will make things so much easier.Third, your wife needs to keep all the receipts, and they should be organized. Fourth, you need to be paying quarterly estimated taxes so you dont get hit with penalties. This part kind of sucks, but your wife also has access to a lot of advantageous tax structuring and benefits that are specially for sole proprietors.Fifth, if your wife intends to keep this business up, fork over the money to meet with an accountant who works specifically with small businesses and sole proprietors. Ask lots of questions, take lots of notes, and make sure you understand how to do everything yourself. At this point the business isnt big enough to warrant paying someone to handle it full time, but it will give you peace of mind to have a professional walk you through it the first time. 