What file format should I use for saving my images (not for Web sites)?

1. Photoshop’s native format, .psd, or the .tif format are the best ones to use for saving images that you are going to edit. You should not edit a .jpg image and then save it as a .jpg since the .jpg format is “lossy.” What that means is that every time you save a .jpg it is compressed and image data is discarded. Repeated saving can cause serious degradation of your picture quality.
2. Photoshop’s .psd format is lossless, and will allow you to save all layers.
3. The .tif format is lossless (does not lose any image data) and is universally recognized by other computer applications.
4. If you have limited storage space for your images, you should save as .psd during the time that you are editing the picture, and then, as the final step, you can save as .jpg which will greatly reduce the file size. Saving as .jpg just that one time will minimize the data loss from the picture. You can then delete the .psd version in order to free up space on your hard drive.