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PSD is the default file format for Photoshop, but saving files in TIFF format can be better due to compatibility with other graphic design programs. TIFF files can be opened by various software, unlike PSD files, which may require specific software. TIFF files are more compact than PSD files, making them easier to share. Compressing TIFF files can reduce their size without affecting quality, making them ideal for last-minute modifications or emergencies. Sending TIFF files is more convenient than PSD files due to their smaller size.