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 often seek the help of tax professionals or use software to ensure accuracy and compliance with tax laws. During tax preparation, taxpayers must determine their filing status, identify eligible deductions and credits, and complete the appropriate tax forms. The goal is to minimize tax liability while adhering to regulations set by the Internal Revenue Service (IRS) or local tax authorities. Proper tax preparation can lead to potential refunds or reduced tax payments.