That's the scariest part of the installation.
The object is to squeeze the rubber doughnut enough to prevent leaks and to seat the tank on the bowl, without cracking either the tank or the bowl. During the tightening process, be sure the tank is coming down parallel with the bowl, by seeing if the tank rocks equally, frontward and backward, and the gap is the same on each side. The initial placement of the tank on the doughnut is important -- be sure it's level to start with. If you want to really overengineer the job, use a feeler gauge to monitor progress. As things draw together, tighten each nut slightly -- maybe 1/8 of a turn -- and give the tank the rock test. If it rocks, tighten again. (These are 1/4-20 threads, so an eighth of a turn works out to 1/160" -- not a huge movement.) All of a sudden it won't rock. Stop.
That's my advice, but I've only installed two of them. Wait to see what someone who's done a few hundred has to say.