Also, while the rest of your advice is sound, it is unncessary to organize an LLC or incorporate a S-Corporation for side projects. In either case, you will face additional taxes (nominally called "fees") for the privilege, along with additional tax filing burdens. You can already deduct business-related expenses as an individual. Indeed, both LLCs and S-Corps are treated as "pass-through" entities, so you would already be doing that for your LLC/S-Corp expenses.
The primary reason to form an LLC/S-Corp for a side project or for consulting is for liability protections (i.e., lawsuits, debt, etc.). Unfortunately, for single-member LLCs or sole-owner S-Corps, creditors will generally require the owner to contractually waive such protections.
The secondary reason, and the reason you're probably thinking of: you can sell the LLC/S-Corp, recognizing capital gains (lower tax rate) or even avoid taxes altogether (via certain norecognition transactions). In contrast, it is extremely difficult to sell an unincorporated/unorganized business, and you will essentially always recognize the gain in such a sale.