Yes, you should keep records of all improvements to your home. You never know when you might decide to convert it to rental property or put a portion of it to use for business.  In either case you need to know the basis in order to calculate the depreciation. And, of course, Congress can be fickle.  They could decide to take that capital gains break back before you decide to sell..

When you sell a stock or mutual fund, you need to be able to determine your basis in it. This means that you need to know the purchase price and amount of dividends reinvested. You also need to know the date of purchase. The 1099B sent to you at the end of the year normally gives only the date of sale and sale price. Keeping records of your purchases is your responsibility, although the brokers don’t put much emphasis on this. With stock (unless you sell all of a holding) you normally figure gain on the basis of first in first out.  It is assumed that what you bought first is sold first. With funds you are normally looking for average cost per share. This is found by adding up all investments including dividends and dividing by the number of shares held. Obviously this is not possible unless careful records have been kept.  Sometimes the companies are bought out or merge.  Then old records may not carry over. If this happens and you have not kept your own records, you can find historical data at Yahoo! Finance. Commodities trading and Forex are a little different. Commodities brokers will usually give you a statement showing how to report your gains and losses as partly long term and short term capital gains. Forex is only considered capital gains income, if you make an election before the start of trading to treat it as such. Otherwise, just subtract what you started with from what you ended with and report this on the Other Income line of 1040. There is no need to document each trade, although you might want to do so just to see how fast you're going broke.

How long to keep tax records is a perennial question.  The answer is that it depends on the type of return.  Generally the IRS does not go back any further than three years on audits.  For a basic return keeping it for three to four years is probably enough.  The situation is more complicated for returns with business or rental  property with depreciation involved.  If the IRS disallows depreciation they can go back to the beginning, for rental property that could be twenty to thirty years. So if you have a business or are engaged in renting property, you should keep the returns for as long as possible (at least seven years to 10 years) or forever.

How much time you save by filing a return electronically depends on the type of return and when you file it. A 1040EZ filed in the middle of January does not need electronic filing. You will get the refund at about the same time by just mailing it.  The difference amounts to only a couple of days. A return filed at the peak filing times of the first two weeks of Februrary or the second week of April would take much longer without electronic filing.  Longer returns always benefit from electronic filing no matter when they are filed.

Trade ins of business property always require an adjustment to the basis of the new property.  It is generally better to simply sell or donate the old property, and then be able to take full depreciation on the new equipment. It’s also much simpler that way.