In her free time, my wife writes a food blog that gets a respectable amount of traffic. From time to time, businesses will approach her to sponsor a post about their products. At the end of the year, she typically gets 1099-MISC forms for the resulting remuneration.
The blog incurs some expenses (web hosting, some material costs), but since I've been treating it like a hobby, the deduction of those expenses is limited to 2% of our AGI--a threshold it doesn't nearly approach.
What would she need to do for us to be able to treat her blog like a business instead of a hobby? For example, would she need to register as an LLC, or get a EIN? She is the only "employee" of the blog.