Current Events in January 2015

Friday's report by the U.S. Labor Department showing a sharp drop in the Consumer Price Index (CPI) is, at first glance, good news for consumers.

The December CPI fell 0.4%, largely on the steep drop in gasoline prices. That gave consumers who drive cars a nice end-of-the-year bonus.

But consumers who don't drive a car didn't fare nearly as well. And even motorists had to give back some of their fuel savings when they sat down at the dinner table.

Rising food prices

While the government's gasoline index plunged 9.4% – a massive one-month decline – the food index rose 0.3%, the largest jump since September. Drilling deeper into the food index we see that food consumed at home also rose 0.3%, as 5 of the 6 major grocery store food groups were more costly.

The cost of dairy and related products increased by the largest amount, rising 0.6% after declining slightly in November. Fruits and vegetables also cost more. The fresh vegetables index rose 2.4%, negating a 1.3% decline for fresh fruit.

Prices for meats, poultry, fish, and eggs all went up. The index for other food at home increased 0.3% while the cereals and bakery products index advanced 0.2%.

Give and take

In short, it cost less to drive to the grocery store but cost more to fill up the cart when you got there. And this is not just a one-off in December. The government statistics show the cost of food prepared and consumed at home has risen 3.7% over the last 12 months.

It also cost more to eat at restaurants. The index for food consumed away from home rose 0.3% in December on the heels of a 0.4% increase in November, and has risen 3.0% over the last year.

Other items, in addition to food, were more costly in December. Even though oil and gasoline prices were lower, people heating their homes with natural gas paid 1.5% moe last month. Homes using electricity – and that's about all of them – paid 0.8% more.

It cost more to put a roof over your head, with rents and owners' equivalent rent and lodging away from home all rising 0.2%.

It cost more to go to the doctor in December, with medical care rising 0.5%. The index for prescription drugs rose 0.9% and the hospital services index increased 0.5%.

Air travel and used cars cheaper

Was anything else besides gasoline cheaper? Sure. If you bought a used car or truck, took a trip on an airline, bought some clothing, selected a new sofa for the living room or restocked the liquor cabinet, you saved a little money.

But to say that inflation plunged in December, as the headlines proclaimed? Not really, at least not for most consumers.

A federal court has ordered Health One Pharmaceuticals of City of Industry, Calif., and Richard S. Yeh, its president and owner, to stop selling its products until the company comes into compliance with the U.S. Food and Drug Administration’s (FDA) dietary supplement manufacturing regulations and other requirements.

Health One Pharmaceuticals is a private label and contract manufacturer of dietary supplements.

The decree, signed by U.S. District Judge Beverly Reid O’Connell of the Central District of California, requires Health One Pharmaceuticals -- under FDA supervision -- to recall and destroy all dietary supplements that were manufactured, prepared, packed, labeled, held or distributed between September 1, 2011, and January 15, 2015.

“When a company puts consumers at risk, the FDA will take action to protect public health,” said Melinda K. Plaisier, FDA associate commissioner for regulatory affairs. “Our goal is to ensure that consumers have access to dietary supplements that meet federal standards for safety and quality.”

Serious violations alleged

FDA issued Health One Pharmaceuticals a warning letter on March 28, 2012, that outlined serious violations of FDA’s current good manufacturing practice (cGMP) requirements.

The violations included failure to perform tests to verify the identity of dietary ingredients used to manufacture the supplements; failure to establish appropriate manufacturing controls; and failure to maintain, clean and sanitize equipment.

Despite assurances from the firm that it was correcting the violations noted in the warning letter, follow up inspections showed that the company failed to correct all of the manufacturing violations. Failure to follow cGMP requirements made the firm’s products adulterated under the Federal Food, Drug, and Cosmetic Act.

According to the complaint filed with the court, certain dietary supplements manufactured by Health One Pharmaceuticals also were not properly labeled because the labels did not list the common or usual names of all product ingredients.

In order to resume operations, Health One Pharmaceuticals needs to receive permission from the FDA and hire an independent expert to assess whether the firm is in compliance with cGMP requirements.

Audit reports documenting compliance with FDA manufacturing regulations then need to be filed with the agency biannually for at least five years.

Heywood’s Meat Haus & Provision Co., of Marietta, Ga., is recalling approximately 931 pounds of tasso (pork shoulder) products.

The products may contain peanuts, known allergens, which are not declared on the product label.

There are no reports of adverse reactions due to consumption of these products.

The following item, produced on various dates from August 25, 2014, to January14, 2015, is subject to recall:

• 10-lb. cases of “Heywood’s Provision Company Tasso”

The recalled product bears the establishment number “EST. 44805” inside the USDA mark of inspection, and was shipped to restaurant locations in Georgia.

Consumers with questions about the recall may contact Patrick Gebrayel at (404) 410-7997.

Dish Network may have saved a few dollars in its contract tussle with Fox but it has rebranded itself as Satan in the minds of many loyal Fox fans.

"I called and told them that if they lost Fox News I would leave...They did and I did!!!" said an angry Fox follower named Wayne in one of many angry reviews and emails submitted over the last few weeks. 

"Dish has violated my contract," said a viewer who signed herself Mary Mary. "When I joined Dish you offered Fox News. Since you no longer supply what I signed up for i no longer have to pay you. I will not pay until Fox News is back."

Not to be contrary, but Mary Mary should check her contract, as should anyone else who tried to dump out of their Dish agreement. There are numerous clauses that hold Dish harmless if any of its suppliers (i.e., program producers) can't or won't deliver the goods. 

What Wayne and many others missed was that the dispute was not political -- after all, Dish had a similar falling out with CNN just a few weeks earlier -- but just another in a seemingly endless series of disputes over licensing fees.

After all, while Fox, MSNBC, CNN, et al, may seem like political organizations to their viewers, the truth is that they and their distributors, like Dish, are in it for the bucks and both parties are trying to maximize their return. It's like the coffee bean farmers who sell their produce to Starbucks, although the networks are in a stronger position than your average coffee bean farmer.

News is a lot like coffee, actually. You have to keep brewing up a fresh batch or it gets stale and bitter. 

So despite the turmoil among a healthy number of its 14 million subscribers, Dish Network is now back on track, Fox is back on the satellite and all is right with the world for at least the next three years, which is how long the companies' new contract extends.

Besides Fox News, the new deal covers Fox Business as well.

“We thank the viewers of Fox News and Fox Business and Dish customers for their patience throughout this process,” the companies said in a joint statement.

Gee, thanks guys. Feel free to hold us hostage anytime. 

For a couple of months now we consumers have watched with wide smiles on our faces as the price of gasoline has fallen.

It fell below $3.30 a gallon, then $3. By mid-December it was below $2.50 a gallon – and even well below $2 in the cheapest states. It was a wonderful thing. For consumers.

The financial community, however, is terrified.

Why? Because the collapse of oil prices poses a systemic risk, albeit a smaller one, just as the collapse in home prices in 2009 did.

Housing similarities

When home prices collapsed their value as assets evaporated. On an individual basis, many homeowners saw their equity disappear. They might have gone from having $100,000 in home equity to being “under water,” owing more than their homes were worth.

Some people who had owned their homes for a decade or longer or owed very little on their original mortgage decided to take advantage of surging home valuations, refinancing and taking out tens of thousands of dollars in equity. Many lost their homes when home values sank.

The systemic risk to the economy, however, came from bundling these mortgages into securities and selling them to investors – investors who largely borrowed the money from banks to buy them. When home values fell and many went into foreclosure, these assets became “toxic.” Other investors wouldn't touch them because it was impossible to tell which bundles contained mortgages in default.

Shale revolution

The collapse in oil prices has been similar, but so far, on a smaller scale. And while both consumers and financial institutions were affected by the housing collapse, consumers have actually benefited from oil's collapse.

How did all this happen? In the past 5 years American oil production has surged, largely because of the shale revolution – and cheap money.

With historically low interest rates tiny oil companies could borrow huge amounts of capital to expand their drilling operations. Banks were only too willing to lend the money since oil was $100 a barrel or more and no one could imagine it going down – just like no one could imagine home prices falling in 2008.

Rob Raymond of RCH Energy made this comparison last month in an appearance on CNBC.

Homes and oil wells

“The issue with this has become, what were houses in Florida and Arizona in 2000 to 2006 became oil wells in North Dakota and Texas in 2009 to 2014, and most of that was funded in the high-yield market and by private equity," he told the business news channel. “And now that a barrel of West Texas Intermediate crude oil has fallen from $100 to $60 in five months, those energy producers are in trouble.”

And just maybe, so are the banks that loaned them money and the investors who purchased their bonds.

But where the housing crisis crushed millions of consumers who bought or refinanced their homes at the wrong time, consumers are mostly winners with oil's collapse – at least, so far. And they are starting to figure out they have been paying inflated prices for fuel for years.

Because more and more analysts are beginning to refer to oil as “a bubble” that has finally popped. When a commodity is in a bubble, it's price is not determined by the costs of producing it but what people are willing to pay for it.

Stocks, houses, oil

We've seen this movie before. There was a tech-fueled stock market bubble in the late 1990s. There was a housing bubble in the early to mid 2000s. Since 2005, there has been an oil bubble.

But the speculators who drove up the price of oil are now not willing to pay very much, and in some cases have profited by “shorting” the oil market, betting prices will go even lower, basing their decision on the belief the world is producing more oil than it can consume.

As long as it doesn't bring down the economy, this is good news for consumers.

Are you ready to file your 2014 federal income tax return? Probably not. But if you are, the Internal Revenue Service (IRS) is ready for you.

The tax agency is touting what it calls “a growing array of online services,” including features it says will help you understand how the Affordable Care Act (Obamacare) will affect you tax time, along with the availability of the Free File program.

The IRS expects to receive about 150 million individual income tax returns this year, with more than 4 out of 5 returns filed electronically. The Free File program opens today, and the agency will begin accepting and processing all tax returns on Tuesday, Jan. 20.

Obamacare kicks in

This year’s return will include new questions to incorporate provisions of the Affordable Care Act (ACA). The majority of taxpayers -- more than 80% -- will simply need to check a box to verify they have health insurance coverage. For the minority of taxpayers who will have to do more, useful information and tips regarding the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA may be found at IRS.gov/aca.

“Our employees will be working hard again this season to help the nation’s taxpayers,” IRS Commissioner John Koskinen said. “We encourage people to use the tools and information available on IRS.gov, particularly given the long wait times we anticipate on our phone lines. As always, taxpayers can benefit by filing electronically.”

Free File ready for business

Taxpayers can begin preparing their returns using the Free File system today. Available only at IRS.gov, Free File offers two filing options:

Brand-name software, offered by IRS’ commercial partners to about 100 million individuals and families with incomes of $60,000 or less; or

Online fillable forms, the electronic version of IRS paper forms available to taxpayers at all income levels and especially useful to people comfortable with filling out their own returns.

E-file, when combined with direct deposit, is the fastest way to get a refund. More than 3 out of 4 refund recipients now choose direct deposit. People who e-file make fewer mistakes, and it costs nothing for those who choose Free File.

In all, 14 software companies will be participating in this year’s Free File program.

Taxpayers who purchase their own software can also choose e-file, and most paid tax preparers are now required to file their clients’ returns electronically. In addition to Free File, commercial software companies also are currently available for taxpayer use.

The IRS will begin accepting and processing all returns -- whether e-file, Free File or paper tax returns -- on Jan. 20.

Like last year, the IRS expects to issue more than 9 out of 10 refunds within 21 days.  

Southwest Airlines is being fined $1.6 million for violating violated federal rules involving long tarmac delays last January. It's the largest civil penalty a carrier has been assessed for violating the rules.

According to the Transportation Department (DOT) Southwest failed to offer passengers on 16 aircraft delayed at Chicago Midway International Airport the chance to get off the plane within 3 hours of arrival and failed to have sufficient staff available to implement its Tarmac Delay Contingency Plan.

“Airline passengers have rights, and the Department’s tarmac delay rules are meant to prevent passengers from being stuck on an aircraft on the ground for hours on end,” said U.S. Transportation Secretary Anthony Foxx. “We have aggressively enforced, and will continue to aggressively enforce, our tarmac delay rule to ensure carriers have adequate resources to minimize passengers’ exposure to lengthy tarmac delays.”

Southwest staffing problems

Under the DOT’s aviation consumer protection rule enacted in 2009, airlines may not allow tarmac delays longer than 3 hours on domestic flights at U.S. airports without giving passengers an opportunity to leave the plane. Exceptions are allowed only for safety, security, and air traffic control-related reasons.

An investigation by DOT’s Aviation Enforcement Office found that on January 2 into January 3, 2014, 16 Southwest flights experienced lengthy tarmac delays at Midway in excess of 3 hours. Southwest experienced a malfunctioning of its crew scheduling system and an unexpected shortage of staff, particularly the carrier’s ramp-crew, which inhibited the carrier’s ability to clear aircraft from Southwest’s gates in a timely manner to accommodate arriving flights. Severe winter weather at Midway contributed to the tarmac delays.

Prior to this order, the largest civil penalties were $1.1 million in 2012 and $900,000 in 2011. DOT assessed a larger civil penalty against Southwest because the lengthy tarmac delays involved more flights and affected more passengers than those in 2011 or 2012 (neither of which involved Southwest).

To date -- including this order -- DOT has issued 17 orders assessing a total of $5.24 million dollars in civil penalties for violations of its tarmac delay rules.  

A sharp drop in the cost of gasoline helped push the Consumer Price Index (CPI) lower in December.

According to figures released by the Labor Department (DOL) the CPI was down 0.4% on a seasonally adjusted basis. For all of 2014, the cost of living rose 0.8%, a notable improvement over the 1.5% advance in 2013 and the second-smallest December-December increase in the last 50 years. The average annual increase over the last 10 years is 2.1%.

Energy and food

The cost of gasoline was down sharply -- 9.4% -- a big contributor to the decline of 4.7% in overall energy prices last month. For the year, energy prices are down 10.6% over the span.

Food prices, meanwhile, rose 0.3% -- the largest increase since September. The cost of fresh vegetables led the advance, with a gain of 2.4%. Fresh fruit prices, on the other hand, were down 1.3%. Meats, poultry, fish and eggs edged up 0.3%. For the year, food prices shot up 3.4% -- more than triple the 2013 increase.

The “core rate” of inflation, which excludes the volatile food and energy sectors, was unchanged in December. Last month was only the second time since 2010 that it did not increase. For all of 2014, the core rate is up 1.6%, versus a 1.7% increase in 2013, and below its 1.9% annual rate over the past ten years.

The complete CPI report is available on the DOL website.

The number of U.S. foreclosures continued to dwindle in November.

According to CoreLogic, a provider of property information, analytics and data-enabled services for the month of November 2014, there were 41,000 completed foreclosures across the country, down 9.6% from the 46,000 tallied a year earlier and a drop of 64% from the peak of completed foreclosures in September 2010.

On a month-over-month basis, completed foreclosures were down 12.6% from 47,000 in October. As a basis of comparison, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006 -- prior to the housing market meltdown in 2007.

“The foreclosure rate fell in every state, with only the District of Columbia seeing a small increase," said Molly Boesel, CoreLogic senior economist. “However, some states still have foreclosure rates of more than twice the national rate. While the national level of foreclosures may normalize in the next 2 years, there will always be the potential for some pockets of distress in the mortgage market.”

Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since September 2008, there have been approximately 5.5 million completed foreclosures across the country, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 7 million homes lost to foreclosure.

November highlights

• November represents 26 consecutive months of double-digit declines in the year-over-year percent change in the foreclosure inventory.
• All states posted double-digit declines in foreclosure inventory year over year; but the District of Columbia saw a 17.8% increase.
• Thirty-five states showed declines in year-over-year foreclosure inventory of greater than 30%, with the largest declines in Florida (-48.1%) and Utah (-48.9%).
• The national serious delinquency rate was 4.0% in November -- down 22.8% from November 2013 and the lowest rate since June 2008.
• The 5 states with the highest number of completed foreclosures for the 12 months ending in November 2014 were: Florida (118,000), Michigan (50,000), Texas (36,000), California (29,000) and Ohio (29,000). These states accounted for almost half of all completed foreclosures nationally.
• Four states and the District of Columbia experienced the lowest number of completed foreclosures for the 12 months ending in November 2014: South Dakota (54), District of Columbia (62), North Dakota (298), West Virginia (534) and Wyoming (573).

Toyota Motor Sales is recalling approximately 5,000 model year 2014-2015 Prius V vehicles.

The front passenger seat is equipped with an Occupant Classification System (OCS), which activates / deactivates the passenger seat air bag system depending on the weight of the seat occupant. There is a possibility that some OCS's may not have been calibrated properly during the vehicle manufacturing process.

Under some conditions, this could result in the failure of the airbag to deploy, increasing the risk of an injury to a front seat passenger in the event of crash.

Toyota says it is not aware of any injuries or fatalities caused by this condition.

Owners of the recalled vehicles will receive a notification by first class mail, and dealers will recalibrate the OCS properly.

Consumers may call Toyota customer service at 1-800-331-4331.

One thing driving new car sales in the last couple of years has been the rise of leasing. Once most common on luxury cars, consumers increasingly are choosing to lease all sorts of vehicles, mainly because financing the purchase of a new car has become cost prohibitive for many consumers.

Because leases are structured, based on the value of the car at the beginning of the lease and what it's worth at the end, lease payments are much lower than purchase payments. With a lease you pay only for the value of the car you use. With a purchase, you pay for the whole thing.

Scot Hall, Executive Vice-president of Swapalease.com, has studied used car leasing and says its payments would be even lower than new car leases. Because of that, he thinks the concept of used car leasing is poised for a comeback.

A comeback, because it's hard to find a used car lease these days.

Hard to find

“To the best of my knowledge there's no one doing it at the scope at which it used to be done, pre-recession, Hall told ConsumerAffairs. “There definitely was an appetite for it, but these leasing companies went away from it for some reason.”

Swapalease, an online marketplace matching up people who want out of their lease with those who would like to drive the car for the remainder of the term, commissioned a survey to see what consumers think about leasing a used car.

The survey found 82% of drivers across the U.S. would consider leasing a 3 year-old used car or truck.

Hesitation

The biggest hesitation the survey found was the issue of maintenance. If you lease a new car, it's under warranty the entire time you drive it. It's new, so it shouldn't have any repair issues.

But Hall says leasing a used car shouldn't be any more scary than buying one. And the used cars most likely to be leased would only be 3 years-old and have an extended warranty.

“If the car is part of a typical certified, pre-owned program – and I can't think of a manufacturer that doesn't have one – then it's going to have an extended warranty and have gone through a fairly rigorous reconditioning,” Hall said.

Lower monthly payment

The biggest draw for used car leases, however, is probably the cost. Used car leases will, in most cases, be much lower than the lease of a new car, because of the way leases are structured. Remember, it's the cost of the car when you get it and its value when you turn it in.

“One of the benefits from a mathematical standpoint on a used car lease, most of the depreciation is going to have already taken place,” Hall said. “In fact, year 1 is going to be the year that vehicle takes the biggest depreciation hit.”

So how much lower is the typical used car lease payment going to be? Hall says it's going to vary, depending on the kind of car.

“But I think it's safe to say that the savings that one would realize on a used car lease, if set up properly, is somewhere in the range of $100 to $150 a month, which is pretty substantial, considering you're going to be driving a car that has a warranty and has been reconditioned,” he said. “It's not going to be a new car, but for that significant difference in price, I think it makes for a compelling argument to go that way.”

For now, however, consumers may have a hard time finding a dealer that offers a used car lease. In time, though, Hall predicts more will.

With the surge in new car leases over the last couple of years, Hall says those vehicles will hit the used car market in the next year or two. He expects many will be leased instead of purchased.

Google is halting sales of its controversial Google Glass, saying it wants to develop the next version outside the harsh glare of publicity. The first version of the wearable, voice-activated device was slammed by privacy advocates.

Consumer Watchdog -- a California non-profit -- said Google should not offer a new version until the privacy issues are resolved.

“Google Glass may have appealed to a bunch of socially clueless ‘Glassholes’ who were oblivious to our privacy rights, but the device fulfilled no real consumer need,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “I’m only surprised it took them so long to kill the program as we know it.”

Last April, the group issued a report that found Glass inappropriate for the broad consumer market and urged consumers not to buy the device. 

By withdrawing the product from public view while it undergoes further testing and development, Google is adopted the methodology used by Apple, which develops products in secret and releases them only when they are in their final version.

Google said it will continue to sell Glass to corporations and developers but will not sell to the public after Jan. 19.

"Stalker's tool"

Consumer Watchdog said that Glass 2.0 must include privacy protections. The key problem with the wearable device, Consumer Watchdog said, is that it allows a user to easily make surreptitious and intrusive video recordings.

“Simply put, it is a perfect stalker’s tool,” said Simpson. “It’s difficult to see how they solve that.”

“Glassholes wanted the device because they thought it made them look cool,” said Simpson. “Now even Google gets that it didn’t.”

If you have an email account, it's pretty much guaranteed that sooner or later you'll receive a vaguely addressed and poorly written message, supposedly from a friend, relative or someone else who has your email in their address book, claiming to be in deep trouble and begging you for money to help them get out. (Indeed: chances are you've already received dozens, if not hundreds, of these messages — but for the sake of this hypothetical let's pretend that you, Fearless Reader, just got your first-ever email account today.)

Sometimes the senders of those messages claim to be stranded in a foreign country, after thieves stole their money and passport. Other times they'll say they're stranded in another state, after their car broke down in Sticksville and they can't afford repairs. Or perhaps they say they've been arrested for some petty offense, and need money to bail themselves out of jail.

Whatever that email says, it's almost certainly a scam. Sometimes it's called the “Grandma scam” or “Grandparent scam,” because the scammers often claim to be the victims' grandchildren in need of emergency help, but the grandparent scam is merely one variation of what's better known as an “imposter scam”: you think it's a friend or relative who contacted you, but it's actually an imposter.

It's a big-enough problem that last summer, the U.S. Senate's Special Committee on Aging held hearings about it, and collected heartbreaking (and all-too-typical) testimony from various victims such as “Roger W.” (his full name is being withheld for fear additional con artists will seek him out): in December 2013, Roger, who was 81 years old at the time, got a call from a scammer claiming to be his grandson.

Supposedly, the grandson had been arrested for speeding and drug possession, and needed bail money. Roger and his wife eventually bought and sent $7,000 worth of prepaid (and untraceable) money cards before finally contacting their actual grandson on the phone and learning he was fine – no speeding tickets, no arrests and certainly no calling his grandparents to request thousands of dollars in bail money.

Imposter scams

Imposter scams conducted over email are even more commonplace, because a typical person can only make one phone call at a time, whereas the number of emails you can send out at once is nearly endless. Here's a missive ConsumerAffairs' editor just received today, supposedly from a former contributor who wrote for us a few years ago:

Subject: Greetings

I Hope you get this on time, i and my family made a trip to Turkey for a Conference Meeting and am having financial difficulties here because Our bags stolen from us with Our Mobile and personal effects therein. I don't know if you can help me with a short loan, the bad news is Our flight will be leaving very soon. let me know if you can be of my help.I promise to refund you once i return back home and am sorry if i am inconveniencing you.

Hope to read back from you soon.

Regarrds,

[Name]

Chances are this email sounds familiar because you've received similar ones, with only slightly different details: last year we got a message supposedly from a realty agent with whom we had a slight acquaintance, claiming to be trapped in Italy rather than Turkey.

If you receive such a scammy message, the safest and simplest thing to do is simply delete the email. If you're worried that the supposed sender actually is someone you know and care about, stranded overseas (or wherever) without any money, then you can take steps to call or contact that person through your regular communication channels – i.e., call your grandson, or the police department who claims to have arrested him, before giving any money for supposed bail payments. (If you don't have any “regular communication channels” with that person – say, because the email supposedly came from a realty agent you haven't spoken to since you rented that apartment from her several years ago – then go back to “delete the email.”)

And remember this anti-scam rule: ignore any request for money or payment in cash, or via a wire transfer or prepaid money card – in other words, any request for money that is untraceable once it's sent.

Using the “short form” is the quickest and easiest way to file your tax returns and millions of taxpayers use it. But with that form you can't itemize deductions, you must take the Standard Deduction.

At some point taxpayers may have deductible expenses and think they should drop the short form and go with the standard Form 1040, so that they can take advantage of those deductions.

But sometimes they shouldn't. According to the Internal Revenue Service (IRS), you should only itemize deductions if your total deductions are greater than the standard deduction amount.

Standard Deduction

For the 2014 tax year, the standard deduction for a single taxpayer is $6,200 and $12,400 for a married couple filing jointly. That's what a taxpayer may deduct from their income without itemizing any expenses.

That means if a couple purchased a home at the beginning of 2014 with a mortgage of $140,000, they probably paid a little more than $5500 in mortgage interest last year. They could itemize deductions and write off the $5,500.

But just because they can, doesn't mean they should. If they itemize they can't take the Standard Deduction. If the mortgage interest is the only deductible expense they have, they're taking a $5,500 deduction and giving up a $12,400 one.

Consider all deductions

That said, there may be several other expenses you incurred through the year that could also be write-offs, if you itemize deductions. Besides mortgage interest on your home, you can also deduct the taxes paid.

If you have significant uninsured casualty or theft losses, that could add to the deduction total. If you have large uninsured medical or dental expenses or large un-reimbursed employee business expenses, itemizing may be in your best interest.

The key number is the standard deduction. You probably shouldn't itemize if your total expenses don't exceed it.

Tax bracket

A secondary consideration is your tax bracket. If you are in a high tax bracket, a deduction is worth more than if you are in a low bracket.

Here's an example. John and Loretta have a taxable income of $80,000. That puts them in the 25% bracket, meaning they pay 25% of their income in taxes.

George and Linda earned $195,000. That puts them in the 33% tax bracket.

Each dollar of itemized deductions will save John and Loretta 25 cents while George and Linda will realize 33 cents.

When it's not obvious

Sometimes the decision to itemize or not is not that obvious. That's when you should seek help from tax experts. They may lean toward itemizing because, frankly, filling out the long form and itemizing usually results in higher fees than just filing with the short form.

But TurboTax says 1 out of 4 taxpayers will end up paying less in taxes when they itemize. The company points out that other considerations, like age, can affect your bottom line tax.

H&R Block notes there might be cases when your itemized deductions are less than your standard deduction, but it still makes sense to itemize. It says you might want to do this if itemizing on your state return provides a savings that more than makes up the difference on your federal return.

Meanwhile, the IRS says it will begin accepting returns electronically on Jan. 20. Paper tax returns will begin processing at the same time.