Tax planning refers to the process of organizing and managing your financial affairs in a way that minimizes tax liability. It involves making decisions on investments, expenses, and other financial transactions with an eye towards reducing or deferring taxes. Tax planning can help individuals and businesses save money on their tax bills, increase after-tax income, and make better use of available deductions and credits. Effective tax planning requires a thorough understanding of the tax code, as well as knowledge about investment strategies and financial products that can help reduce tax liability.