Republicans leaders in the House on Tuesday and the Senate in the early hours of Wednesday pushed through a sweeping reform of the U.S. tax code. Depending on the size, structure, and sector of your business, the changes could either help or hurt the bottom line.

The bill will require a second House vote on Wednesday due to a procedural hiccup, but President Trump plans to sign the Tax Cuts and Jobs Act into law in coming days. It represents the culmination of the GOP's more than six-week effort to notch a significant legislative victory, as Trump's first year in office draws to a close.

"The cynical voices that opposed tax cuts grow smaller and weaker, and the American people grow stronger," Trump said ahead of the bill's passage. "This is for people of middle income, this is for companies that are going to create jobs."

Critics aren't convinced, however, that the legislation will grow the economy as Trump and the Republicans have intended. At a recent press conference, Federal Reserve chairwoman Janet Yellen said she anticipates only a "modest lift" to economic growth as a result of the tax package.

It's also worth noting that the breaks extended to lower and middle-income brackets could be phased out after 10 years. "I don't call it a tax cut," Anupam Satyasheel, an entrepreneur and former financial analyst with Barclays, told Inc. "It's a recodification that helps the 1 percent."

Here's what the final version of the tax bill includes, and what it means for you:

  •  Per Trump's promise, the legislation offers generous tax cuts to U.S. corporations and the wealthiest personal income brackets. The maximum corporate tax rate will be reduced to 21 percent from the current 35 percent. These cuts, as written, are permanent.
  • There will be a shift to a "territorial" tax structure. Corporations that do business abroad will no longer be taxed by the U.S. on the profits they generate overseas.
  • The majority of U.S. businesses are pass-through entities, meaning you're taxed according to the owner's personal rate. Under the tax code rewrite, you may be able to deduct up to 20 percent of income. However, these credits are temporary, set to expire after 2025. Caveat: If your business is a form of "professional service"--such as legal consulting or outsourced design work--these credits do not apply to begin with. In either case, you will likely end up paying more in taxes than C corporations.  
  • A major tax requirement of the Affordable Care Act has been scrapped: The mandate that individuals purchase health insurance or pay a fee. Without this mandate, insurance companies will likely be forced to raise premiums on both individuals and their employers, while passing on associated costs to the people who have health insurance. (Translation: It could become much more expensive to offer health insurance to your workers.) According to the most recent Congressional Budget Office estimate, thanks to this change, as many as 13 million fewer individuals will have health coverage by 2026.
  • The rewrite scales back SALT (state and local income tax) deductions. Families will only be able to deduct up to a total of $10,000 in property and income taxes. Businesses in areas such as infrastructure and education may suffer, as states struggle to raise the same level of capital for key urban projects, such as building bridges and funding hospitals. 
  • You will need to change what you withhold from employees' paychecks, ASAP. The standard tax deduction has doubled, while personal exemptions have been eliminated. Plus, as much as 28 percent of federal tax may be automatically withheld on any bonus, commission, or supplemental wages, up from the current 25 percent rate. Note that although these changes won't take effect until 2018--since the IRS needs time to review and incorporate them--complying could require some 11th-hour planning. The American Payroll Association has reportedly expressed concern for the timetable of this monumental change in payroll taxes, writing in a letter to lawmakers: "Our members are already starting to panic, on behalf of themselves and millions of employees, about the effect on 2018 withholdings of a tax bill that will be effective a week after its enactment."
  • A note on employee perks: You will no longer be able to fully deduct the cost of food and beverage provided to workers. Instead, per the final accord, you may only deduct up to 50 percent of those costs. That provision lasts until 2025, after which you will no longer be able to deduct it at all.  
  • Select industries with lobbying muscle were able to secure last-minute benefits. Craft brewers will see reduced excise taxes as part of the final agreement, for example. Senator Rob Portman (R-Ohio), whose state is home to more than 100 distilleries, reportedly added the provision during negotiations to merge the House and Senate versions of the bill last week. (Here is the consolidated legislation, published on Friday.) Meanwhile, some engineering and architecture firms will not be disqualified from tax breaks as other "professional services" are (see p. 33, 22-A). 

Some experts are bullish on the new law, cheering the permanent tax break for corporations, while others are concerned for small to medium-size enterprises. "The hype that is being spit out about this law is not true," says Anne Zimmerman, president of the Cincinnati accounting firm Zimmerman & Company CPAs, and co-chair of the left-leaning Businesses for Responsible Tax Reform. "There is nothing in this law that is good for small businesses."

Still, others argue that the simplification of the tax code is sure to increase small-business investment and--ultimately--growth. "For years, the burdensome and complex tax code has held back small-business owners and stifled new investments," said the International Franchise Association (IFA) in a statement earlier this month. "With two-thirds of new jobs being created by small businesses and 80 percent of franchises filing as pass-through entities, important changes were made in the final days for these franchise small businesses."