So tomorrow is Tax Day, and you can sit and watch your friends scramble in chaos when they realize that they haven't finished their taxes, they don't know where all their forms are and they were sure there was a receipt for a donation sitting around somewhere.

Excuses | Taxes Guide | Need An Extension?

Then it dawns on you: Your taxes aren't finished, either, and they won't be by midnight on Tuesday, April 17.

You're not alone. The Internal Revenue Service expects to receive nearly 10 million extensions for 2007, up from 9.5 million last year. On the IRS Web site, Form 4868, the form needed for an extension, is the most requested.

Jennifer Cropper of the Minnesota-based Calidel Financial Services LLC said that if you don't have your taxes postmarked by 11:59 p.m. on April 17, you need to file an extension to save yourself a headache later.

"It's an extension to file, not to pay," said Cropper. "I let clients know that up front."

An extension gives taxpayers until Oct. 15 to file their return, but you still have to send in a payment. Procrastinating won't save you any money on taxes, but it can cost you a little money if you don't get the extension filed.

"People definitely need to file an extension, otherwise they can be subject to fines and interest payments," she said. "It's best to estimate at the high end of what you think you may owe. The worst case is that you will get a refund back or you can apply it to next year."

You may end up being a little too responsible and overpaying your taxes when you file an extension. Unfortunately, a refund is all you get back.

Cropper said as long as the IRS refunds an overpayment within 45 days of the due date or the date the return was filed, they do not have to pay interest.

What Are The Penalties?

According to the Form 4868 Publication that accompanies the forms, you will owe interest on any tax not paid by the regular due date of your return.

The interest runs until you pay the tax, and even if you have what you think is a good reason for not paying on time, you still owe interest.

The late payment penalty is usually 0.5 percent of any tax not paid by the regular due date. It is charged for each month or part of a month the tax is unpaid. The maximum penalty is 25 percent.

The late payment penalty will not be charged if you can show reasonable cause for not paying on time. You can attach a statement to your return -- not to Form 4868 -- to explain the reason.

A late filing penalty is usually charged if your return is filed after the due date, including extensions. The penalty is usually 5 percent of the amount due for each month or part of a month your return is late. The maximum penalty is 25 percent.

If your return is more than 60 days late, the minimum penalty is $100 or the balance of the tax due on your return, whichever is smaller.

So while paying taxes late may still hurt a little more than paying on time, it will hurt a lot less if the extension is filed first to soften the blow.

Additional Resources:

Video: Tax Tips: Last-Minute Advice
Video: Tax Stressed? Relax, Organize, Get 'Er Done
• Forms: For Each State
• In Depth: Why Pay? | Can't Pay?
• Link: Nearest Post Office
• Article: Why Pay On Time?