President Obama signed into law the new bill that would extend the Bush tax cuts, fund unemployment insurance for another 13 weeks and puts a limit on estate tax. Many people are discouraged by the estate tax provision stating that it will reduce the amount of income the government generates in taxes by $20 billion over 10 years. Those in favor of the new estate taxes have commented that leaving more money in the people’s hands that earned it is better for the economy.

Social Security benefits may be stagnant, but the IRS is increasing the amount you can deduct on your 2011 taxes as a result of buying long-term care insurance. Premiums for "qualified" long-term care insurance policies (see explanation below) are tax deductible provided that they, along with other unreimbursed medical expenses, exceed 7.5 percent of the insured's adjusted gross income..