Haphazard records can cause you to needlessly lose money to taxes. The better the records you keep, the easier it is to search for opportunities, which is what tax planning is all about.
When it comes to sorting through financial papers, err on the side of caution in deciding which ones to save and which to toss out. To make the chore manageable —and to reduce the likelihood of mistakes—limit yourself to a single category of records at each sitting. For example, tackle all records dealing with investments one evening, insurance another, and so on. Incidentally, this do-it-yourself undertaking provides valuable side benefits: less-cluttered storage spaces and a clearer picture of your financial affairs.
A little time spent now, can save you tax dollars in April!