Deductions & credits

You will probably make out better with the credit, then with depreciation.  The credit is worth up to $1,200.  If you did both heating and air, you could get $1,200. 

If you have a qualified home office, you can put it in as a business asset, then you would select specific qualified improvements.  A few questions later you will be asked "Tell us more about your business asset"  Here you will need to select that it is not used entirely for business.  Then you will need to allocate based on the square footage of your home office to your total home.  It will then be prorated based on the percent usage and depreciated over 39 years. If you use only 10% of your home for the home office and paid $12,000 for the HVAC system, your deduction would be less than $50.