I'm quite ruthless when it comes to toy sorting. We get given alot from family (and family friends) then birthday and Christmas on top it would be insane if I kept everything out all the time. Once a year I do a massive toy clear out when they are not around (usually when they go to my parents for a week for childcare help)
I first start with looking at space. What space do I have realistically? Is the storage fit for use or do I need to think about changing up what I have
I then split the space between the children (for me it is 2 DC) so half each at the moment (although DS 7 is probably getting smaller things now than DD3).
We use Ikea Kallax with the cubes so its really easy to divide.
I filter out anything broken and it gets thrown away. We only fix really sentimental things. I also don't replace unless its a beloved toy and they still want a new one weeks later.
Then sort into which child or age maybe in your case.
Then toy category e.g all cars together, all dolls together, all lego together.
Then I check:
What duplicates there are?
What similar there are?
Is anything not age appropriate?
Then I go by interests:
What does DD play with the most or DS play with the most?
What do they both play with?
What is sentimental?
Sometimes I put stuff in the loft I'm not sure about in case DC want it again. Or if I think they are going through a phase e.g. thunderbirds for DS - He loved them 2 years ago and we sourced a Tracy island off marketplace. He hasnt played with it for a while BUT I know he will come back around to it. It is also really hard to find for a reasonable amount of money so I've put it in the loft for next year. Same with Paw Patrol. That just came back out the loft for my youngest.
I either sell or charity shop stuff we don't want to keep. I try to minimise the amount we just throw away.
It's carnage in my house toy sorting weeks but it works. And the kids can then see and play with things they actually forgot they had sometimes.