New Year, New Tax-Saving Opportunities

Get Jim Cramer's picks for 2006.

There's a lot to look forward to in 2006.

Tom Cruise is having a baby (with a baby), the new high-definition DVDs are scheduled to be released and you can get a tax credit for putting skylights in your kitchen.

And while the latter is not nearly as sexy as the others, at least it will save you money while you read Star magazine or watch Matt Damon in The Bourne Supremacy from your breakfast table. (What could be better?)

Along with some increases in 401(k) contributions and gift tax limitations, new energy-efficient credits that become available in 2006 are the big news for next year. So here's how you can start saving the environment and some money.

Find Your Green Thumb

If you're in the market for a hybrid car, put the purchase off until the new year. The deduction for buying a hybrid increases from $2,000 in 2005 to $3,400 in 2006, although it varies among the different cars available. For example, the credit on the Toyota Prius is $3,150, but the Ford Escape will only get you a $2,650 credit. Still, it's better than nothing. But keep in mind these credits are limited to the first 60,000 hybrids that the manufacturer sells. So if you buy the 60,001st car, your credit will decrease and eventually the available credits will be phased out completely.

On the home front, if you're doing work on your primary home in 2006, save those receipts. If you install new skylights, outside doors, windows or pigmented roofing, you'll be able to claim a tax credit for 10% of the cost. The same goes for high-efficiency furnaces, water heaters and central air conditioners. Unfortunately, though, the credit is a bit limited. The maximum credit is $500 and no more than $200 can be attributable to windows. Again, it's better than nothing.