What the Latest Senate Tax Plan Could Mean for You

Under the Senate plan, which differs in significant ways from the House version, many of the tax changes affecting individuals would revert to what they are now. Those provisions subject to sunsetting include:

• Near doubling of the standard deduction. For individuals, it would rise to $12,000.  For married joint filers, it would jump to $24,000 from $12,700 under current law.

• Changes to individual tax brackets. The new Senate plan has seven brackets. For individuals, they range from 10 percent for incomes below $9,525 to 38.5 percent for incomes of over $500,000. 

• Personal exemptions. These are worth $4,050 per household member under current law but would be eliminated under the Senate plan.

• Raise child tax credit to $2,000. Under current law, it's $1,000. The Senate bill also raises the income cap for eligibility.

• Doubling of the teacher expense credit to $500. Under current law, it's $250. 

• Expansion of who's eligible for the business "pass-through" tax break. This break affects taxpayers who get a portion of their income from sole proprietorships and some other types of small businesses. The Senate proposal expands the types of business owners who would be eligible for this break, which allows for 17.4 percent of income to go untaxed. 

• End of the alternative minimum tax. This tax mainly affects households making between $200,000 and $400,000 a year, but affects some making significantly less. 

However, the amended Senate bill does make permanent other key measures affecting individuals. For instance, it would end the Affordable Care Act's requirement that most Americans have qualifying health insurance by removing any penalty for not complying. 

In addition, the modified Senate bill would make permanent a new way to calculate how tax law provisions would rise subject to inflation. Some observers have noted that this would make many tax breaks subject to inflation less valuable over time.

Sunsetting many individual tax provisions would ensure that the Senate plan didn't add to the deficit after 10-years, which Senate rules require if a bill is approved with a simple 51-vote majority.

However, Senate Republicans want corporate tax cuts to be permanent because businesses need to plan long-term, says Nicole Kaeding, an economist at The Tax Foundation, Washington, D.C., a nonprofit think tank studying tax issues.

"If businesses believe their cuts are termporary they won't be wiling to invest," she says.

Families, on the other hand, generally make expenditure decisions on a year-by-year basis. And tax cuts subject to sunsetting often are extended year after year, Kaeding says. 

"There is a strong case to be made that Congress won't let them expire in 2026," she says. "There would be pressure from the public. History suggests they will be extended."

Still, the uncertainty could affect people planning retirement, a home purchase, or other major decisions, says Howard Gleckman, senior fellow at the nonprofit Tax Policy Center, based in Washington, D.C.

"The debate over the tax bill this year created enormous uncertainty to start with," he says. "The proposed changes increase that uncertaintly by orders of magnitude. It leaves the taxpayer not knowing what taxes are going to look like in the future."

What's more, whether those provisions are indeed extended has much to do with who's in power, says John Diamond, director of the Center for Public Finance at Rice University's Baker Institute for Public Policy in Houston.

"It all depends on who's going to be in charge of Congress," he says.