Homeowners should act fast to slash upcoming income tax bill

Paying your January mortgage bill and the second installment of your property taxes now can trim your income taxes or fatten your refund when April arrives.

Q. I have already paid the first installment of my 2013-2014 property tax bill, and the second installment is due in the spring. But if I paid the other half now instead of waiting until next year, would I be able to deduct the entire amount on the income tax return I will file in April?

A. Yes, the total amount of both the first and second installments would be deductible on the 2013 tax return that you’ll fill out a few months from now.

Paying the second installment in December is a good way to reduce any taxes you might owe Uncle Sam, or to fatten your refund if you expect to get money back. You can add to those savings if you also pay your January mortgage payment now, because interest charges are also deductible.

There are two caveats here. If you decide to make those payments early, do it by Dec. 10 or so to allow the county tax collector and your bank time to cash your check and post the amount to your account. Also, you may want to consider skipping this strategy if you expect to make a lot more money next year than you did in 2013, because the higher your income, the more valuable your write-offs.

Q. We live in a two-story home that was built several decades ago. My elderly father-in-law recently came to live with us, but there’s no bathroom downstairs and it’s very difficult for him to negotiate the stairs that lead up to the two bathrooms on the second floor. Adding a new bathroom on the first level would cost about $20,000, a contractor told us, in part because it would require excavation of part of our back yard to increase the size of our home’s slab. Any suggestions?

A. I called a few contractors, plumbers and design professionals for a response to your question. It was interesting to learn that many two-story homes — especially those built before World War II — didn’t have bathrooms on the ground-floor level for “privacy reasons,” and because women wanted a powder room adjacent to their upstairs bedroom to put on makeup and change clothes before going out on the town.

One possible solution, an architect told me, would be to convert a downstairs closet that’s currently being used for coats or other items into a bathroom for your father-in-law. Such conversions can be made in spaces that are as tiny as 4-square feet, and sometimes even smaller. That’s big enough to include a toilet and, perhaps, a little shower.

Pantries and under-the-stairway storage areas often can be alternatives to creating a new loo, too.

Such conversions can be tricky. Remember that the closer the converted area is to your existing plumbing system, the more you will likely save because you won’t need as much piping and the labor cost that’s involved to install it.

You also would need to include a separate piping system to vent the new bathroom’s gasses. The pipes typically lead from the first story up to the second and then out through the roof, but you can save money if the new ventilation system simply can be linked to your current one — whether it’s connected to a laundry room, a stove or an upstairs bathroom.

Q. We have been checking the possibility of getting a security system for our home, but it would be expensive to install a good one and also would cost about $40 per month to have it monitored by a live person who could call the police if there was a problem.

A salesman at our local home-improvement store said it would be cheaper and just as effective to buy a $99 auto-dialer system, which includes an alarm for the front and back doors and automatically would call 911 if a burglar broke in. Are these systems any good?

A. Auto-dial systems are getting a little better, but they still can’t match the security (at an extra cost) of one that’s electronically monitored 24/7 by security personnel.

Installing an inexpensive auto-dialer typically involves a few basic steps. You first must install magnets, wireless connectors or similar equipment to your front and back doors, plus to the windows or other entryways that a criminal might find accessible. The connectors trigger a phone call to 911 if they’re broken or tripped while you’re away and a prerecorded message like, “I need help” or “unauthorized entry, unauthorized entry!”

Many retailers don’t sell auto-dialers anymore. Some quit marketing them because the systems became notorious for creating alarms that prompted police, fire and other public-safety officials to respond to false emergencies. Several police and fire departments across the U.S. won’t even answer a call from an auto-dialer now, unless there’s a real-life voice on the other end of the call.

If you’re seriously considering the purchase of an auto-dialing system today, call your local law-enforcement agency and fire department first to find whether they will respond for help. If they won’t, the system would be worthless.

Real estate trivia: The average new home completed last year had 2,505 square feet of space, the Census Bureau reports, up 25 square feet from the year before and just 16 feet shy of the record set in 2007.

Ÿ For the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405.

© 2013, Cowles Syndicate Inc.