Today’s Question: After working the master file in 16-bit, is it OK to convert the master file to 8-bit right before saving the master file as a Photoshop PSD?
Tim’s Quick Answer: My answer here would be “no”, in part because it would be necessary to also flatten the master image if you are going to convert it to 8-bit per channel mode.
More Detail: When you convert an image from 16-bit per channel mode to 8-bit per channel mode in Photoshop, the adjustments are also “scaled” to the 8-bit per channel mode. In other words, you lose the benefit of having worked in the 16-bit per channel mode in the first place.
Therefore, if you need to convert a layered image from 16-bits to 8-bits per channel, it is important to flatten the image.
As any photographer who has been reading my work for any length of time can probably appreciate, I prefer to retain as much information as possible in my master image file. That means I prefer not to flatten a layered master image in Photoshop, and I prefer to keep that master image in the 16-bit per channel mode.
If you want to convert a master image to the 8-bit per channel mode in order to reduce the file size, you would also want to flatten the image first to retain the benefit of the original adjustments you applied in the 16-bit per channel mode.
So, if you’re comfortable both flattening the master image and converting the result to the 8-bit per channel mode, then you can convert. If you’re not comfortable flattening the master image I would advocate for keeping that master image in the 16-bit per channel mode as well.