Tax preparation is the process of organizing and filing tax returns to report income and calculate taxes owed to the government. This involves gathering financial documents, such as W-2 forms, 1099 forms, and receipts for deductions. Individuals and businesses can prepare their taxes themselves or seek assistance from professional tax preparers. During tax preparation, it's important to understand the relevant tax laws and regulations, which can vary by state and country. Many people use tax software or hire certified public accountants (CPAs) to ensure accuracy and maximize potential refunds. Proper tax preparation helps avoid penalties and ensures compliance with tax obligations.