Maybe it was red during Spring after the leaves emerged from the buds but not in Winter when it is not supposed to have leaves since it sheds them throughout the Fall. Now is the time your tree will start to shed all of its leaves. Why not post pictures of it now though?

That's fascinating - because it certainly did not drop any of it leaves this past winter.

It stayed pretty lush and red all through out the winter (we moved in Jan) - and even though an incredibly cold winter, the leaves still stayed on the tree/shrub. The leaves started to turn green as spring progressed.

Could this not be a Japanese maple then - I research the leaf type and thought it was a lace leaf Japanese maple? I could have easily mislabeled it - since I'm not the one who planted it!

It is definitely a Japanese maple and a laceleaf variety at that. But you must be mistaken about its winter foliage :-) Even in very mild winter climates - like mine - they do not have leaves in winter and certainly could never be described as 'lush' in January.........at least not anywhere in the northern hemisphere!!

It doesn't look like it's dying. It looks like it had a rough summer which, according to you, it did. Unless you see larger branches turning black or looking dead, calm down. Weather happens. Consider ways of providing it some shade in the afternoon.

I would question as to whether it is really "overgrown" :-) That is pretty much the way weeping dissectums grow.....a series of overlapping or crossing branches, typically forming a dense umbrella or mushroom shaped mound. Unless you experience very heavy, wet snowfalls, that framework of intercrossing branches actually provides additional structural integrity to the tree.

Some do opt to prune these but it requires a rather skilled hand and it is usually done to enhance the structural framework and emphasize the tree's sculptural quality. Some will also opt to thin the canopy to some degree to make the tree a bit more transparent. If you do decide to prune for either of these reasons, do so as soon as the leaves fall. If you wait too long into the winter months and dormancy, the sap will start to rise and the tree will bleed a lot. Not really an issue for the tree but it can be off putting to novice pruners :-)

You can control the lateral spread any time you like. Just cut back the horizontal branches to a 'Y' or joint or at the very least, a leaf node.

Nice house, nice tree. Congrats.
The lower leaves should not be touching the ground, leave half a foot or however much more you want between the leaves and the ground; prune each branch that carries leaves that are touching the ground, don't just cut tree until it doesn't touch the ground like when they use shears to shape shrubs, but grab each branch that does, follow its stem until a node (the "Y"), and cut above the node. By "above" I mean farthest away from the trunk/center of tree, so between you and the node if you're looking directly at the trunk, I mean otherwise you'd be cutting the whole Y off and that makes no sense... Cut very close to the node, like a quarter inch.

There may be dead wood on tree. Look for it and remove all of it. Deadwood is grey and very brittle. All of it will be inside tree, behind the leaves and on the trunk and branches. Deadwood invites bugs and diseases into tree.

For timing, sure you could do this over the winter in two or three months from now after the leaves have fallen off and tree doesn't bleed sap as much but then you wouldn't be able to see what tree's normal appearance is like if it doesn't have leaves on it, you may think then that it doesn't need pruning...

When you get to the part of "separating the layers" to give tree more transparency, in my opinion it is a matter of choice and taste whether you do it or not, and how far you go with it; I mean I really like foliage and separating layers is done by removing it, so maybe it's a necessary evil, don't know.

Nice tutorial on how to prune the laceleaf maple:
Japanese pruning (part 3 of 4) Shell Pruning of Japanese laceleaf maples

If you do decide to prune after watching that video I just urge you to take your time and really consider every cut. I spend a lot of time just staring at my trees before deciding what to remove where. Look at it from all angles and try to visualize how each cut will affect the appearance from each. Don't feel like you have to do everything all at once- over the period of a week is just as good. I try to expose a bit of the structure and open things up a tad while not ruining the inherent character.

I usually try to choose one main vantage point from which to judge- in the front of my home for me that is the point where a car turns into my driveway. I view from there and make final decisions based on that angle. But ultimately I try to allow each individual tree tell me how it wants to grow.

It's just so easy to ruin one with one poorly considered cut- think them through.