Some investments give you the ability to enjoy tax-deferred growth. A traditional IRA, traditional 401k, 403b, and permanent life insurance all offer this ability. Plenty of other vehicles do as well. What exactly does it mean to have tax-deferred growth? It means that you “defer” (or put off) paying taxes on the gains and income in that account.

Let’s take an example. Suppose that you have $100 in an account. For easy math, let’s say you earn 10% on it during the year. That means you’ll have $110 in your account at the end of the year. If the 10% came as interest or dividends, do you have to pay taxes on it, and how much? The answer: it depends.

In a tax-deferred account, you will not pay taxes on your earnings this year. You can keep the extra $10 in there to continue to grow. Then, you get growth on top of your growth (otherwise known as compounding). Next year, you’ll have a whole $110 in the account that you can earn on.

However, assume that your account was not a tax deferred account. The IRS would say that you owe income taxes on $10 of income. Perhaps you have a hypothetical average tax rate of 25%. In that case, you’d owe $2.50 in taxes by next April! Where does the $2.50 come from? It’s up to you. You could pull it out of the account and leave $107.50 in there for future investment, or you could come up with the $2.50 from somewhere else.

Tax-deferred accounts help you compound money inside the account. There are always tradeoffs. For example, you might have to pay income tax when you take the money back out. Or, you might have to follow certain rules with the money – like leaving it in the account until you reach a certain age.

If you are a Turbo Tax customer who couldn’t e-file your tax return on April 17 due to high server volume, you will be glad to know the IRS has extended the deadline to midnight, April 19.

Millions of taxpayers trying to electronically file tax returns at the 11th hour jammed servers and some filers were turned away. The company processed more returns on April 17 than they did on peak filing day last year.

The IRS has agreed to extend the deadline for taxpayers who were unable to file because of problems with the system. Turbo Tax is a product of Intuit, Inc.

If you’ve prepared your state tax return and are bemoaning the chunk of your money that belongs to “them”, maybe it’s time to consider a move.

An annual report published by the Tax Foundation ranks states by the tax burden on their residents. Alaska has the lowest tax burden, taking only a 6.6% nibble of its residents’ incomes through state, local and property taxes. The least tax-friendly state is Vermont. Vermont takes the largest bite of resident’s incomes, collecting a whopping 14.1% through state and local taxes.

Check out where your state ranks on the list.

1. It’s easier. Tax preparation software prefills a lot of information (especially if you get your W2 online). It’s quicker to punch in numbers on your keyboard than to try to write it all out legibly.

2. Fewer mistakes. Again, tax preparation software makes it easier by doing all the math for you. Fewer mistakes mean a return that is processed faster.

3. No missing tax breaks. The tax program you use will be loaded with all the new tax rules and allowable deductions, whereas some IRS forms this year have some deduction lines missing and taxpayers who don’t know about those deductions can miss some important tax savings.

4. It’s faster. The IRS estimates that it processes electronically-filed tax returns in half the time it takes to process paper returns.

Buying a good tax preparation software might save you money and pay for itself. If your adjusted gross income is less than $52,000, you can use the IRS’s Free File service by choosing an e-file partner company from the IRS website. Electing for direct deposit saves time too and gets your refund to you even faster.