Thinking of replacing a window or door in your home? Perhaps your hot water heater is percolating and has been around a few too many years? Now is the time to consider replacement because if you have it done before December 31, you'll get a tax credit (not just a deduction) for doing so. This means you take the dollar amount right off the check you would otherwise write to Uncle Sam (or he adds it to your refund).
At right -- a solar heating system control -- you don't need to get this complex to get the credit!
Tax credits are available for many types of home improvements including adding insulation, replacement windows, and certain high efficiency heating and cooling equipment. See chart. The maximum amount of homeowner credit for all improvements combined is $500 during the two year period of the tax credit. This tax credit applies to improvements made to your primary residence from January 1, 2006 through December 31, 2007.
Note: your hot water heater replacement must be the "tankless" kind, also known as "On-Demand." Perhaps a good idea for your home, perhaps not. But worth investigating, not only for the tax credit but also for energy saving ($$) for many years. Windows and doors are easier to qualify.