Every Social Security beneficiary will find a small, but pleasant, goodie in his or her Christmas stocking -- or, more precisely, in the benefit check scheduled to arrive on Jan. 3. Beginning with that first check, all benefits (including Supplemental Security Income) will go up by 3.1 percent.

The increase is based on the rise in the cost-of-living index from the third quarter of 1984 to the third quarter of 1985. (Under the law, the CPI had to go up at least 3 percent to trigger a boost in benefits.)

This is the smallest increase in recent years, which has to be considered good news because it means that inflation -- at least as measured by the CPI for urban wage earners and clerical workers -- was equally low.

This rise in benefits means a 1986 increase in payments from the Social Security trust funds of a little less than $6 billion -- about $1 billion less than had been projected. SSI payments (paid from the general funds of the Treasury) are expected to increase by about $285 million over 1985.

What the right hand giveth, the left hand taketh away. On Jan. 1, Social Security taxes paid by those still in the work force also will go up.

The tax rate paid by workers, and matched by employers, will rise from this year's 7.05 percent to 7.15 percent; and the maximum earnings on which tax is paid will jump from $39,600 to a new high of $42,000.

As a result of these two changes -- the increases in the tax rate and the increase in the minimum wage base -- the ceiling on Social Security taxes to be paid in 1986 will jump by $211.20 to $3,003.

If you're self-employed, you'll see an even larger percentage increase in Social Security tax, from this year's 11.8 percent to 12.3 percent for 1986.

In fact, the tax rate on the self-employed rises to a nominal 14.3 percent, but there is a credit of 2 percent this year.

The various ceilings on earnings allowed before benefits are lost go up next year, too. If you're under 65, you will be permitted earnings of $5,760 in 1986 (versus $5,400 in 1985).

For those between 65 and 69, the ceiling jumps from $7,320 to $7,800.

If you exceed the applicable limit, $1 of Social Security benefits will be withheld for each $2 of excess earnings.

Starting with the year in which you reach your 70th birthday, there is no limit on the amount of money you can earn; you receive your full Social Security benefit regardless of earnings.

(We're talking here only about "earned income" -- wages, commissions, fees, earnings from self-employment. Income from dividends or interest, capital gains, pension and retirement payments, IRA, Keogh or 401(k) plans doesn't come under this rule.)

Q: In previous columns, you have discussed the cost basis when selling stocks or mutual-fund shares acquired through dividend reinvestment plans. But how does one handle the time element? Does the IRS require the dates of each dividend received, or is there a convenient shortcut? A list of stock dividends received each quarter over a period of years would be lengthy.

A: You do have to account for the sale of shares acquired within the previous six months and those owned longer than that -- but there is a shortcut.

You need not list each quarterly dividend by date of acquisition. Instead, group all the long-term dividends (those owned longer than six months) and combine them in a one-line entry in Part II of Schedule D; then do the same thing for shares owned six months or less for the short-term section. Two entries -- and the job is done.

Q: Recently, I cashed in two whole-life insurance policies, simply because I had a better use for the money. Both of them still had a way to go before being paid up at age 70. My insurance agent told me I did not have to report the money I received on my income tax return. Is this correct?

A: Probably. The only time you have to report the cash proceeds when you terminate a life insurance policy is if the amount received exceeds the total amount of all premiums paid during the life of the policy -- a very rare circumstance.