Wife wants to open a website and sell services. She is presently employed fulltime with a company. To start with, can she just file for a DBA in her name and start her online side business. We expect the first year may not be profitable and she can start to see profits next year. We understand all her expenses can be shown as business expenses in the first year and hence we(filing jointly) can claim some tax advantage for this year. Does she need to file for a LLC? Please comment.

She doesn't need to, but having a company name, business credit card, and generally good accounting practices might help in case IRS will ask you to back up the claim that expenses were business.

LLC provides limited liability, so depending on what services she is selling, she might benefit. How much exposure would this web site open her up to?

I'll agree that this isn't a financial decision, but a legal one.

If she is at risk for getting sued, then you'll want to either incorporate or LLC.

Since you say selling materials and services... for marketing... then, well, I don't know. Personally I'm incorporated...