How to tell if your water heater is leaking
For Electric Water Heaters
For electric water heaters, you should remove the upper and low covers. The covers are located on the side of the water heater. Once removed look for signs of water, it you find any then your water heater is probably leaking. The next place to look is around the base of the electric water heater where the metal bottom meets up with the metal side. Push around with your hand and see if water pushes out between the seam. If you see water then the bottom piece is probably filled with water.
For Gas Water Heaters
To determine is a gas water heater is leaking, you just need to remove the burner access cover at the bottom of the water heater. This cover usually comes on easily and once inside see if you find water standing inside. If you see water inside the cover area then water is leaking from the water heater and running down to the bottom of the water heater.
If your water heater is leaking
If you find that you have a leaking water heater, what are you options? Well if the tank is leaking then you will need to replace the water heater. The cost and effect required to repair a leaking water heater is much more than just replacing it. You will usually be able to get a new water heater installed for between $600-$800 including labor. Almost all residential water heaters fall in this price range. If you get an estimate over $800 make sure you get a second estimate, there are contractors that will take advantage of you if you aren't knowledgeable of your situation.