Want to save some tax dollars and instill a good work ethic in your children? It is legal to hire your children to do specific jobs and pay them for it. They might clean the office, send out mailings, file papers, or the like. They could work after school or accompany you to the office on a Saturday to do these jobs. You can pay them at an hourly rate or a flat fee.

This kind of set-up has multiple benefits for everyone involved: Your kids earn some spending money, they develop good work habits, and their income is not taxed. (A minor has a $4,700 exemption per year, so no taxes have to be deducted on the first $4,700 in wages.)

One builder employed his four young children, ages 7 to 13, to do office chores, paid them $2,000 each, and paid only Social Security taxes. He also saved himself from paying them an allowance. — Howard Scott is a business writer and small business tax preparer in Pembroke, Mass.