Tax optimization refers to the strategic planning and management of financial activities to minimize tax liabilities while remaining compliant with tax laws. This process involves identifying deductions, credits, and other tax benefits that can reduce the amount of taxable income. Individuals and businesses often seek professional advice to navigate complex tax regulations effectively. Effective tax optimization can lead to significant savings, allowing individuals and businesses to allocate more resources toward investments or personal expenses. Common strategies include utilizing retirement accounts, tax-loss harvesting, and taking advantage of tax credits related to education or energy efficiency.