On Friday President Obama signed into law The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. Known as the law that extends the “Bush tax cuts” there are some lesser known included provisions impacting individual income tax payers:

AMT “PATCH”: The AMT exemption for 2010 increases to $47,450 for single filers and $72,450 for joint returns. A proactive patch is included for 2011 raising the exemption to $48,450 for single filers and $74,450 for joint returns.

EXEMPTIONS/DEDUCTIONS: There will not be a phase out of personal exemptions or miscellaneous itemized deductions for high income filers.

PAYROLL TAX “HOLIDAY”: Effective for the 2011 tax year will be a 200 bps reduction in the employee portion of Social Security taxes. The reduction in rate from 6.2% up to the Social Security wage base ($106,800 in 2011) to 4.2% will bring tax savings of $2,136 per person or $4,272 for joint filers. Note the employer portion of Social Security taxes remains at 6.2%.