As of right now, expenses are close to zero, and income is equal to zero. Risk of law suits is also very low.
At what point should I move over to LLC? When the expenses, income or risk of litigation reaches a certain threshold?
Ask your accountant. If you don't have an accountant get an accountant :-)
Expenses and litigation aren't the only issues. In the UK for example there are tax breaks for investors that only apply to LLCs. There are often ways you can split your income between wages and dividends that make you more tax efficient as an LLC.
There are also advantages when dealing with some clients who for legal and social reasons prefer to deal only with LLCs or LLPs.
Accountants are really good at figuring this stuff out. I know if you're small spending tens or low-hundreds on somebody else's advice seems a lot - but in my experience it will likely pay off immediately, or at worst in the very short term.
Accountants are good at saving their clients money - it's their job :-)
Talk to some of your local businesses. Get some recommendations. Find an accountant. Ask them.
When your business makes enough money that you can pay professionals (accountants, lawyers) to take care of all the LLC maintenance business (taxes, making sure you follow applicable laws etc.)
In software business the probability of being sued is minuscule and the protection that LLC offers usually overstated (see e.g. http://www.nolo.com/legal-encyclopedia/llc-basics-30163.html for basics of what LLC does/doesn't protect you from).
I currently operate as Sole Proprietorship and personally would not change to LLC even if I could afford it because it's much more hassle (paperwork-wise) and since I'm in small-time software business where I never have to take on debt to keep writing more software, the LLC protection from not paying my debts is useless.