Pay the Kids
You may be able to save tax by hiring your children to work for you. A single person, such as a child, can have over $4,000 in earned income without paying any federal income tax. However, if the child has any unearned income, such as interest income, they may have to pay tax even though there is no tax on the wages.

Pay Your Spouse
If you employ your spouse, you may be able to set up a medical reimbursement plan that allows you to deduct your hospital insurance and medical bills as business expenses instead of itemized deductions. Your spouse may also qualify for other fringe benefits.

Pay Biweekly
Paying your employees every two weeks rather than weekly will cut your payroll work almost in half.

Paydays
In deciding when to pay your employees, make sure you have adequate time between the cut-off date and the time the checks must be issued. Usually, this is four days to one week.

Application Blanks
Make sure you have a supply of employment application blanks. If anyone asks for a job, have him or her complete an application blank, even though you may not have any openings at that time. You may have an opening later, and you need to make sure you protect yourself from discrimination charges.

W-4s and I-9s
Make sure you have these forms on file for all of your employees. The W-4 is used to determine withholding, and the I-9 is proof of citizenship.

Avoid Penalties
Penalties can be quite expensive, and they are not tax deductible. The government uses penalties to help ensure things are completed correctly and in a timely manner.

New Hiring Notice
Send the state a new hiring notice whenever you hire a new employee. This notice must be sent within 20 days of the employee start date.

Employee versus Independent Contractor
Know the difference between an Employee and an Independent Contractor. Misclassifying an employee as an independent contractor can result in fines and penalties for you.

Keep Good Employees
Do not make promises to an employee that you cannot keep. Set up a system that enables you to keep your good employees. Find out what motivates your employees. There is no one item that will work for all employees.

Fringe Benefit Programs
Choose your fringe benefit programs based on what will fit your needs and your employees' needs. Fringe benefit programs can be expensive, and remember, you cannot be all things to all people.