Three decades after the last big tax overhaul in 1986, the Republican party is attempting to implement major tax reform by the end of the year—and it will affect nearly all Americans.

The Tax Cut and Jobs Act aims to cut both corporate and individual taxes.

The Bill passed both the Senate and the House of Representatives on a party-line vote. While the specifics of the final bill still have to be reconciled in Congressional Committee, the basic elements of the package are essential to understanding the big changes that may be coming soon:

Raising the Standard Deduction, but not the Tax

Not every single dollar of income tax needs to be paid.

Taxable incomes, or the part of the income that is paid for taxes, can be reduced by taking the standard deduction—a set amount of money the Internal Revenue Service grants to alleviate taxes for individuals and married couples. The amount of standard deduction offered varies according to filing status, age, and vision impairment.

The GOP bill plans to significantly raise the standard deduction to nearly double the amount. This will benefit the majority of Americans who typically rely on the standard deduction to decrease their taxable income.

Tax Bracketing In and Out

Who determines how much tax is paid?

The complex U.S. tax system utilizes seven brackets to categorize their taxpayers and assign them tax rates, or the percentage at which they are taxed, depending on income and filing status. Higher incomes generally pay higher tax rates.

The Senate bill retains the seven bracket system and lowers the tax rate for each, while the House bill simplifies the tax system into four brackets limiting the number of rates applicable. Individuals can be pushed into a lower bracket with lower tax rates or be pushed into a higher bracket with higher tax rates. The consequences will differ for each American.

The Big Business Benefit

Both the House and Senate bills reduce corporate tax rates from 35 percent to 20 percent, seeking to incentivize corporate businesses to bring overseas money back to produce more jobs and stimulate the economy.

This is advertised as the main objective of the Tax Cuts and Jobs Act.

SALT on the State and Local Tax Deductions

Taxpayers in many states pay state and local taxes in addition to federal taxes. From income taxes to property taxes to sales tax, taxpayers can deduct all these costs from their federal taxes.

If these deductions are eliminated, individuals who itemize (itemizing deductions = reducing the taxable income with expenses like medical expenses, mortgage interest payments, large charitable donations, and anything that qualifies) will not be able to write their SALT taxes off, requiring them to pay more in government taxes.

High-tax states like California and New York, in which revenue depends on resident taxes, could be dealt a blow affecting state funding for public education, construction and other public programs.

Mandating the Mandate for Health Insurance

The individual mandate of Obamacare, also known as the Affordable Care Act, requires those in the U.S. to have health insurance that meets specific standards and penalizes any person who does not abide by this rule.

Both versions of the tax bill seek to eliminate the mandate. Individuals will not be required to have health insurance, which could lead to chaos and higher prices in the health insurance markets.

Educational Barrier

Many graduate students are given tuition waivers from the university they attend to help pay for their education which are currently tax-exempt, or tax-free.

The House bill treats these waivers as taxable incomes, taxing graduate students based on the amount of money they receive for their tuition.

Graduate students will be weighed with more taxes if the final bill keeps this intact.

Reconciling the Two Bills

The 500 page bill is comprised of many other constituents that have not been covered.

The House and Senate bills must be identical in order to pass it onto the president. After a mere month of revising, the tax bill may be approved before the start of 2018.