Changes embodied in the Tax Reform Act of 1986 modify the rules for determining if you are required to file a federal income tax return for 1987. Further changes are mandated for tax years 1988 and 1989. Beginning in 1990, indexing of various elements of the tax code is likely to mean annual increases in the floor for filing.

Who Must File

As in prior years, the filing trigger is based on a combination of your personal exemption and your standard deduction. The accompanying table lists the 1987 floor for each category of taxpayer. If your taxable income equals or exceeds the amount shown for your filing status, you must file a federal tax return. (State rules may differ.)

There are some special rules. If your income falls below the specified minimum, you must file a return anyway if:

You want a refund for tax withheld from your pay.

You are entitled to a special refund as a result of the earned income credit.

You received advance payments from your employer in anticipation of qualifying for the earned income credit.

When to File Your federal income tax return for 1987 must be postmarked no later than midnight Friday, April 15. If you can't make it for any reason, you can get a four-month extension to Aug. 15 by filing IRS Form 4868 by April 15.

This form doesn't extend the due date for paying any tax you owe; you must estimate your total tax liability and send payment for any shortfall with the extension form.

Receipt of Form 4868 will not be acknowledged by the IRS; approval is automatic if the form is filed by the April 15 deadline. But you must attach a copy of the 4868 when you later file your return. At that time you must use either Form 1040 or 1040A, not the 1040EZ, and you may not request that the IRS compute your tax.

If you're out of the country on April 15, you get an automatic extension to June 15; when you file later, attach a written explanation of the circumstances to the return. At that time, you are also liable for interest on any tax due from April 15 to the date of payment.

How to File Sign and date the completed return; both spouses must sign on a joint return. Attach Copy B of each Form W-2 you have received on the left side at the middle of the first page of whichever tax form you're using. Do not attach any Form 1099s, such as for interest or dividends.

If there is a balance due, attach a check or money order, payable to "Internal Revenue Service," to the front of the return where indicated -- unless you have asked the IRS to figure your tax. Write your Social Security number on the payment for identification, in case the payment is inadvertently separated from your return. (Do not send cash or stamps.)

Use the peel-off label from the IRS tax package at the top of your return, making any necessary corrections. If you go to a professional preparer, take along the cover page with the label. You are not penalized for not attaching the label, but it permits optimal use of IRS automated equipment and saves your tax dollars.

Mail the return in the envelope that came with your tax package. If you don't have it, the proper mailing address for your state of residence is in the instruction booklet.

Which Form? Any taxpayer may use the long Form 1040; if you qualify under the rules that follow, you may use either the intermediate Form 1040A or the short Form 1040EZ.

Some tax advisers recommend the long form for all taxpayers, to be sure no adjustments or credits are missed. However, your tax will be the same (given the same facts) regardless of which form you file.

Using the simplest form for which you qualify makes the job easier and reduces the chance for error by limiting the number of line entries. But don't go to the simpler forms if using the 1040 will save you tax money.

1040EZ. You may use this simplest form if you meet all these criteria:

You file as a single taxpayer without dependents.

You are neither blind nor 65 or older.

You had less than $50,000 in taxable income.

Your income came only from wages or salary, tips and not more than $400 taxable interest.

You use the standard deduction.

You claim no adjustments or credits.

You didn't file estimated tax for 1987.

1040A. If you don't qualify for the 1040EZ, you may use this intermediate form if you meet these criteria:

Your 1987 income was less than $50,000.

That income came only from wages or salary, tips, interest and dividends and unemployment compensation.

You use the standard deduction.

You claim no adjustments except for IRA contributions, and no credits except for child or dependent care.

1040. You must use the long form if you don't qualify for either of the two simpler forms. Here is a checklist of special tax circumstances that require that you use Form 1040:

You are filing as a qualifying widow(er) with a dependent child.

You have income from self-employment.

You have interest in a foreign account or trust requiring completion of Part III of Schedule B.

You have any adjustment to income other than IRA contributions.

You have any tax credit other than for child or dependent care.

You made payments of 1987 estimated tax.

Underpayment requiring a Form 2210.

You are liable for the alternative minimum tax.

You have taxable Social Security or Tier 1 Railroad Retirement benefits.

You are using five-year or 10-year averaging for a lump-sum distribution.

The detailed information that follows is keyed in most cases to Form 1040. If you are using either the 1040A or the 1040EZ, you should be able to relate this information to the corresponding line or section of your form.

Before You Start Don't pick up your pencil to enter any numbers before you take care of some preliminary steps.

First -- and probably most important -- is to find and sort the records you have been collecting all year. Separate income and expense items into the various categories indicated by the line items on whichever form you're using. It's a good idea to print in red, on each document, the category in which it belongs: medical expense, contribution, interest or dividend income, etc.

Some documents may contain more than one item, so examine each carefully.

For example, your year-end credit union statement may show both interest earned on your share account and interest you paid on a personal or car loan. Your annual mortgage statement probably includes both interest and the property taxes the mortgage holder paid for you from escrow.

If you run into this situation, you should note each "extra" item on a separate piece of paper for inclusion with other documents in that category to be sure you don't miss it.

After you have all the accumulated documents sorted out, it might pay to thumb through your checkbook stubs and any budget records you keep to be sure you haven't missed anything.

If you've started early enough, it might be wise to put everything aside for a couple of days; you may suddenly remember some transaction from perhaps a year ago or more that you had forgotten.

------------- FEDERAL FILING MINIMUMS -----------------

If you are: ----------------------- File only if your -

................................... income is at least:

Single, under 65 ............................... $4,440

--Under 65 and blind ............................ 4,900

--65 or older ................................... 5,650

Head of household, under 65 .................... $4,440

--Under 65 and blind ............................ 6,300

--65 or older ................................... 7,050

Married filing jointly, both under 65 .......... $7,560

--Both under 65, one or both blind .............. 8,800

--One 65 or older ............................... 9,400

--Both 65 or older ............................. 10,000

Married filing separately, ..................... $1,900

(regardless of age or blindness) .....................

Qualifying widow(er), under 65 ................. $5,660

--Under 65 and blind ............................ 6,900

--65 or older ................................... 7,500

Eligible as dependent on another's ............. $2,540

return, under 65, no investment income ...............

--65 or older, no investment income ............. 3,750

--Under 65, any amount of investment income ....... 500

--65 or older, any amount of investment income .. 1,250