Tax planning refers to the analysis of a financial situation with the purpose of reducing tax liability. The tax plan ensures that all elements of the financial plan work together to minimize tax contributions. Through tax planning, individuals ensure they can attain maximum tax capability. Reducing tax liability increases the ability to make contributions to retirement plans and add additional savings which are vital for financial and retirement success. Tax planning consists of various considerations such as taxable income, filing status, adjustments and exemptions, tax deductions and tax credits, and lastly major purchases and investments. Tax planning is crucial for businesses and individuals to help achieve financial goals and objectives.