My niece has decided to cancel our contract for deed on a house she was buying from me. I agree that this decision is best for her at this time. How can we cancel the contract for deed without hiring lawyers since we both already agree on the terms? What paperwork do I need to give the county for them to recognize her forfeiture?

Assuming you did the contract for deed properly, there was no actual transfer of the deed merely a contract. You can merely write an agreement that both parties agree to cancel the contract, sign it, witness it and notorised. Let it show the buyer wished to cancell and the seller is merely agreeing without any penalty.