Is your current water heater starting to show wear and tear, like rust or small leaks? Get a new one. Most home owners replace a water heater only after it stops working. Bad idea. When a water heater fails, there’s the potential for a big, wet mess. There’s also the inconvenience of living without hot water.

Worse, if you wait until it’s kaput, you might rush into a purchase without shopping around or weighing the benefits of newer technologies. When you’re looking to upgrade:

• Make sure the unit qualifies for the tax credits.

• Figure out how big a unit to get. Tankless models are rated by how many gallons of hot water they produce per minute. How much hot water you use at one time will determine what makes sense for your home. Do you take long showers while running the dishwasher and washing machine? Consult a plumber, but figure 3 gallons per minute should be sufficient for most families.

This article provides general information about tax laws and consequences, but isn’t intended to be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.