SOCIAL SECURITY BENEFITS INCREASE 3.6%
 Retirees will receive a 3.6% monthly increase in their Social Security Income benefits in 2012. This is the first cost-of-living increase since 2009.

Also based on increase in average wages, the maximum amount of earnings subject to the Social Security tax will increase to $110,100 from $106,800.

SELF-EMPLOYMENT
 The self-employment tax rate for 2011 dropped from 15.3% to 13.3%, reflecting the one year cut in the Social Security tax also applicable to employees. However, taxpayers taking the above-the-line deduction for one-half of self-employment tax can still claim the same 7.65% amount as in 2010. A provision that for 2010 allowed self-employed individuals to deduct health insurance premiums from self-employment income for purposes of determining self-employment tax was not extended for 2011.

EXTENSION OF EXPIRED INDIVIDUAL PROVISIONS
 Some of the Tax Relief Act provisions that were to expire at the end of 2009 or 2010 have been extended for two years through 2012:

• Marriage penalty relief (the increased standard deduction and expanded 15% bracket for MFJ;
• $1,000 child tax credit and the expanded refundability of the credit;
• Liberalized child and dependent care credit rules;
• The American Opportunity Tax Credit;
• The higher contribution amount and other EGTRRA changes to Coverdell education savings accounts;
• Enhanced rules for student loan deductions introduced by EGTRRA;
• Exclusion for employer-provided educational assistance;