I have been baking and selling hand-decorated sugar cookies from my home. I am getting a good client base and a lot of visibility. What steps should I take in making my business "legal"? Do I apply for LLC? Has anyone had any experience with this? I live in Virginia and this is all very overwhelming , I love doing the cookies, but I worry that I may not be able to continue working from my home?
Thanks so much for your input.

You need to check to make sure it is okay to sell from home in your area, Especially edible foods they may require an inspection of your kitchen.
Where I live you are allowed to sell food from your home but it is best to check into product liability and any other insurance that you might need. You can apply for a vendors license so that you can sell at festivals and other events. You can apply for a Tax identification number so that you can buy wholesale without paying taxes. You can check through the small business association in your area for all your options and requirements.
They may even be able to help you with grants.