Earlier today, Congressional Republicans introduced the Tax Cuts and Jobs Act, the House version of their long-promised tax reform legislation. Here is what you should know about the bill:

How does the plan affect individual taxpayers?

The legislation proposes the following changes:

• Increases the standard deduction from $6,350 to $12,000 for single filers and from $12,700 to $24,000 for married couples.

• Creates a larger “zero tax bracket” by eliminating taxes on the first $24,000 of e.

• Reduces the 7 tax brackets (10, 15, 25, 28, 33, 35, and 39.6 percent) to 4 tax brackets of 12 percent (up to $90,000), 25 percent ($90,000 to $260,000), and 35 percent ($260,000 to $1,000,000) , and 39.6 percent ($1,000,000 and above).

• Increases the Child Tax Credit from $1,000 to $1,600.

• Retains the Earned e Tax Credit (EITC), but eliminates other tax credits such as the tax credit to offset expenses related to adoption.

• Provides a non-refundable credit of $300 for non-child dependents to help defray the cost of caring for other dependents (this credit would expire after 5 years).

• Repeals the existing individual Alternative Minimum Tax (AMT).

• Eliminates most itemized deductions (except those listed below).

• Eliminates the personal exemption (currently $4,050 per person).

• Retains deduction for state and local property taxes up to $10,000.

• Retains deduction for charitable contributions.

• Retains home mortgage interest for existing mortgages and maintains the deduction for newly purchased homes up to $500,000.

• Retains current 401(k) and IRA provisions

• Repeals the “death tax”, the federal estate tax which applies to the transfer of property at death on estates worth $5,490,000 or more.

How does the plan affect individual businesses?

The legislation proposes the following changes:

• Limits the maximum tax rate applied to the business e of small and family-owned businesses conducted as sole proprietorships, partnerships and S corporations to 25 percent from 39.5 percent.

• Reduces the corporate tax rate from 35 percent to 20 percent.

• Eliminates the existing corporate Alternative Minimum Tax (AMT).

• Allows businesses to immediately write off (or “expense”) the cost of new investments in depreciable assets other than structures made after September 27, 2017, for at least five years.

• Preserves business credits for research and development (R&D) and e housing.

• Limits the debt that can be deducted to 30 percent of earnings before interest/taxes/depreciation/amortization (EBITDA).

• In an effort to bring overseas corporate profits back into the U.S., all overseas assets from panies will be considered repatriated and taxed at a one-time lower rate of 20 percent.

• Moves to a territorial tax system that no longer imposes the U.S. corporate tax on foreign profits of panies, though untaxed e currently held overseas will immediately be taxed at a fixed rate: 12 percent for money held in liquid assets like stocks and bonds, 5 percent for intangibles like buildings and factories.

How does this plan differ from the proposal outlined by President Trump during the campaign?

The new plan includes five items that Trumppromised on the campaign trail: reducing the tax brackets, increasing the standard deduction, reducing business tax (though he promised a reduction to 15 percent), and eliminating the AMT and estate tax.

However, Trump’s campaign plan promised to be “revenue neutral” (i.e., would not increase the deficit), a claim which few economists outside of the White House believes is possible.

What happens next?

The bill has to be “scored” by the Congressional Budget Office and the Joint Committee on Taxation to determine the effect on the deficit. Senate rules require that any legislation that increases the deficit in the long term must be passed with 60 votes. Because this bill would likely increase the deficit by more than a trillion dollars over the next decade, it cannot pass the Senate without support from Democrats—which it cannot get. That means that to pass the Senate the legislation will have to be substantially revised.