I have a confession to make: I'm putting my tax return on extension. That's right. And I don't feel remotely bad about it.

Let's face it. Life is crazy. And the tax code is nuts.

The complexity is overwhelming, especially for do-it-yourselfers. And then there are lifeissues, like divorce, a move or a new job, that make getting your return in on time extrachallenging.

It's no wonder the IRS expects a 10% increase in extensions this year to approximately10 million. So it is by no means a black mark on your character if you decide youneed to extend your 2004 tax return.

But there are three important things to be aware of as you weigh your decision to extend:

You must file Form 4868 -- Application For Automatic Extension of Time To File U.S.Individual Tax Return by April 15.

Your tax bill is still due on April 15.

And your extended return will be due on Aug. 15, smack in the middle of daiquiris-on-the-beach season.

Follow the Rules

Just like you always R.S.V.P. to a party invitation, you must follow the same protocol with UncleSam. So R.S.V.P. to him, too. Whether it's your actual return or the extension form, please respondto him by April 15.

Otherwise, he'll get mad and smack you with a 5%-per-month penalty for filing late. Thepenalty is based on the amount of tax you didn't pay on time. And that can add up fast.

And here's one more thing to note about Form 4868: To properly fill it out, you'll need toprepare your tax return.

I'm not kidding.

Form 4868 asks for two numbers from your federal return Form 1040. The first number is yourtotal tax liability, which is line 62, and the second number is your total payments, which is line70. So you'll need to prepare your return to derive these numbers.

So why bother extending, you ask?

Well, there are a lot of valid reasons. You may be waiting on documentation, a.k.a. a Form K-1, froma partnership in which you're involved. These forms usually come in very close to April 15 and you'llneed numbers from that form to get your Form 1040 done.

Or if you're self-employed, you may need time to make your retirement contribution. You haveuntil the due date of your extended return to make your 2004 SEP IRA or Keogh contribution. So ifyou didn't get around to scraping up the money, the extension buys you more time.

Three Ways to Extend Your Return

There are three ways to get Form 4868 in these days.

The easiest way is to dial 888-796-1074 from now until April 15 and use the IRS' automatedsystem that accepts your extension request over the phone.

Big note: If you live and work overseas, or are serving in the military in a foreigncountry, you have through June 15 to make the call.

If you have a tax balance due, and you don't want to mail in a check, you can authorize anelectronic funds withdrawal from your checking or savings account right over the phone. If youchoose to do this, make sure you have your adjusted gross income from last year's tax return forverification.

You can also prepare Form 4868 on a tax preparation program like TurboTax or TaxCut. Then,assuming you attempted to prepare your return, all the proper numbers will just flow to the Form4868 for you. Unfortunately, not all of these tax prep programs will let you electronically filethat extension form. If you use TurboTax, for example, you'll have to print Form 4868 outand mail it because but the program doesn't let you e-file it, says spokeswoman Julie Miller. TaxCut, however, will electronically file it for you for $19.95 (but you'll get a $10 rebate if youthen complete your tax return with TaxCut).

If you do e-file the form, make sure you get a confirmation number from the IRS noting it wasaccepted, and keep that number with your records.

If those two options don't work for you, you can always go to irs.gov and download the form.Print it out, fill it out and mail it in. Just be sure to send it certified mail so you getconfirmation that the IRS received it.

Still Need the Money, Honey

Putting your return on extension does not mean you're putting off paying your tax bill. It isdue on April 15, regardless of when you get around to filing your actual return.

If you don't cough up the cash, a 0.5%-per-month penalty will be imposed for paying late.

Big note: This penalty doesn't apply during the four-month extension period if you paid in atleast 90% of your actual tax liability on or before the due date of your return, says MartinNissenbaum, national director of income tax planning at Ernst & Young.

That means try to estimate your bill as best you can.

So go ahead and extend your return. Just know that come August, while you're lying on thebeach soaking up the rays, you'll have to put down your daiquiri to finish up your tax return.

Hmm. That might actually be incentive enough for me to get it done now.