As the U.S. House and Senate negotiate a final tax bill, reports of compromises and horse-trading are likely to include eye-crossing tax terms and jargon.

But those wonky words have real consequences for taxpayers of all incomes. Here are seven worth knowing, in alphabetical order:

Alternative Minimum Tax (AMT)

Effectively a supplemental income tax aimed at the wealthy. If you make enough money and claim multiple tax write-offs, you'll likely trigger an alternative tax calculation. The amount that calculation adds to your tax bill is your AMT.

While most households who pay the AMT make between $200,000 and $1 million, some earning as little as $75,000 also get snagged. More than 3. 9 million people pay the AMT in a given year, says the nonpartisan Tax Policy Center. 

The House bill eliminates the AMT. The Senate bill raises the income bar so fewer people are affected. But in the Senate bill, today's version of the AMT could be reinstated in 2026 after most tax changes related to individuals expire.

Experts say losing the AMT could reduce the taxes many households pay. But for other taxpayers, the change may not offset the loss of other tax breaks, such as the deductibility of most state and local taxes (see SALT, below). 

"Depending on the individual’s personal situation, this could have an impact up or down," says Lance Christensen, a tax partner at Margolin Winer & Evens, an accounting and business firm based in New York. 

Chained CPI

Built into many elements of the tax code is a way to measure the rate of inflation.

This inflation factor takes into account how the prices of certain consumer goods and services change month to month. The chained consumer price index, or chained CPI, predicts a lower rate of inflation compared to the method that's currently used.

The House and Senate bills propose adopting chained CPI. If that happens, we'd all pay a bit more in federal taxes each year, and a lot more, cumulatively, over many years.

More on the Republican tax plan

That's because the chained CPI will affect how fast tax brackets rise each year, a phenomenon known as bracket creep. If you're a single filer with taxable income of $38,700, your tax rate under the Senate bill would be 12 percent. Under chained CPI, the 12 percent bracket is likely to rise more slowly over time. So if your income goes up, more of it could be subjected to the next higher tax rate.

"It means higher tax than would be the case under the CPI used now," says Eric Bronnenkant, a certified public accountant and head of the tax department at Betterment, an online financial adviser based in New York City.  "In the short term, the dollar amounts of difference are nominal, but over 30 years they become much more pronounced."

Republicans are also considering applying chained CPI to Social Security and other government entitlement programs, with an eye toward gradually reducing those benefits. 

Exemption

This is a portion of your income or assets that is free from tax. For individuals, it's mentioned in two key places in the new tax bills: 

• Personal exemption. For 2017, you get a personal exemption of $4,050 for anyone claimed on your tax return. You subtract that sum from your adjusted gross income to arrive at your taxable income. 

A married couple filing jointly with four children would get a total personal exemption of $4,050 multiplied by 6, or $24,300, on their 2017 tax return. Once their adjusted gross income exceeds $313,800, however, their personal exemption begins to phase out.

Under both House and Senate proposals, the personal exemption would go away for 2018 and beyond. (As with other Senate provisions, it would return in 2026.)

Families could lose from that change, though other proposed measures could mitigate the pain. The Senate plan, in particular, has more-generous tax brackets than current law for taxable income up to $200,000. Both plans, nearly double the standard deduction and increase other tax credits; the House adds a new, $300-per-adult credit that every family can take, though it expires in 2023. 

• Estate-tax exemption (or exclusion). Currently spouses and charities get an unlimited tax exemption on any inherited or gifted amount, no matter how large. Other heirs or recipients get a tax exemption of nearly $5.5 million per individual, and nearly $11 million per couple;  they pay taxes of up to 40 percent on the remaining sum. The Senate would double the estate-tax exemption for non-spousal heirs and recipients. The House plan would repeal the estate and gift tax entirely, so there would be no need for exemptions.

Pass-Through Entity

It's actually spelled "pass-thru" in one version of the Senate bill. And it refers to a business structured as a sole proprietorship, "S" corporation, or partnership. Small manufacturers, handyman services, and one-person accounting offices can be structured as pass-through entities, but so can large companies such as global law partnerships.

Currently, income from pass-through businesses is taxed at the ordinary income tax rate. Both tax bills would give some pass-through businesses a break. The Senate would allow 23 percent of pass-through income to be exempt from taxation. With the House plan, 30 percent of a taxpayer's pass-through income would be taxed at no higher than 25 percent. In both bills, the rest of pass-through income would be taxed at the owner's or partner's ordinary income tax rate. There are additional complexities to both measures; you can read about them here.

The bills make notable exceptions for pass-throughs that are considered services: law firms, accountants' offices, and doctors' partnerships, for instance. Those businesses couldn't use pass-through rates. That discrepancy—and the criticism that wealthy pass-through owners are likely to benefit from this change far more than those with less income—have made this a hot potato among critics of the two tax bills.

Refundable Credit

A refundable credit is different from a tax refund, in which the government gives you back tax that you overpaid. With a refundable credit, you can potentially get back more money from the government than you paid in tax.

The Senate tax bill expands an existing child tax credit to $2,000 and makes $1,000 of that refundable. The House bill makes $1,000 of its $1,600 child tax credit refundable.

If, say, your family owed the feds $1,400 and you had one child, you'd be eligible for the $2,000 child tax credit under the Senate bill. You (or your tax software) would subtract the $1,000 portion that's non-refundable, reducing your tax owed to $400. You could then apply that $1,000 refundable portion; it would erase the $400 you owe and actually refund you $600. You'd get the benefit of the entire $2,000 tax credit.

If, however, you owed $300 in taxes, the tax credit wouldn't be worth as much. You'd first apply $300 of the non-refundable portion to your taxes, to bring your tax owed to zero. You'd then get back the $1,000 that's refundable. The total value of your credit would be $1,300, not $2,000.

"Some people are not going to be able to get the full benefit of the credit," Bronnenkant notes.

SALT

State and local taxes, or SALT, are at the core of a major topic of contention in the tax debate. Both bills would eliminate the ability of taxpayers who itemize to deduct state and local taxes, except for $10,000 in property taxes. According to a New York Times report, there's talk now of giving taxpayers the choice of deducting their property taxes or state and local income taxes. 

In any case, the change could directly affect the estimated, 30 percent of American households that itemize their taxes. Those most likely to be feel the impact are in high-tax states such as California, Connecticut, New Jersey, and New York.

In our analysis of how the proposals would affect some types of families, we found that a New York family making $220,000 with $22,000 in property taxes and $9,700 in state income taxes would pay $1,568 more under the House bill, or a 6.7 percent increase over their tax bill under current law.

Tax experts in these states say that other aspects of the bills would not be enough to offset that pain. "If you have high SALT, the standard deduction is not going to make up for that, especially for a family with kids," says Ed Slott, a CPA in Rockville Centre, N.Y. "The higher child tax credit won't be enough to make up for it, either."

Sunset, Tax Extender

In the tax world, "sunset" means that a tax provision ends. The House's $300-per-adult tax credit sunsets in 2023, making it less valuable than a permanent provision would be. The Senate bill sunsets nearly all tax measures affecting individuals in 2026, except for chained CPI and the estate-tax doubling. 

Politicians front-load their tax bills with benefits for taxpayers—and sunset them later—so they can meet certain legal and budget constraints. The Senate, for example, had to guarantee that the cost of its plan would fall within a $1.5-trillion budget. 

But observers say lawmakers are counting on future Congresses to extend popular tax breaks beyond that—and figure out how to pay for them later. The term "tax extender" describes a bill that extends sunsetting tax provisions; it also can apply to the provision that's being extended.

Which measures could be extended and which could sunset for good remains to be seen.

"Some of the most politically popular stuff will hang around and the others will go away," says John Diamond  an economist and director of the Center for Public Finance at Rice University’s Baker Institute for Public Policy in Houston. "What stays and what goes depends on who’s going to be in charge of Congress on December 31, 2025."

At that point, notes Howard Gleckman, a senior fellow at the Tax Policy Center, Congress will face another fiscal cliff, similar to what it faced at the end of 2012 as numerous Bush-era tax provisions were set to lapse. "It'll be a giant tax and budget crisis that Congress will be forced to deal with," Gleckman says.