1956 Tax Tips from DB&B

William J. Killory, CPA, Member (Aug, 2016)

In honor of our 60th Anniversary, Dermody, Burke & Brown is sharing a series of 1956 Tax Tips from the year we were founded.  

Tip 1 – Social security tax was 2% on the first $4,200 of wages and the Medicare tax was not invented by Congress until the mid-sixties.   

Tip 2 – People with $3,000 of taxable income were in the 20% bracket for federal income taxes.

Tip 3 – Personal exemptions were worth $600 each.

Tip 4 – There was a 10% excise tax on cars as well as tax on tires at a rate of 5 cents a pound.

Tip 5 – There was a 10% excise tax on records and radios.

Tip 6 – 60 years ago there was a cabaret tax of 20% on admissions for any place providing a public performance for profit. The IRS Ruled in 1956 that if “spontaneous” singing happened to break out in such an establishment it would not be subject to this tax. 

Tip 7 – There was a 10% tax on the tools of our trade: the mechanical adding machine, mechanical pencils, and fountain and ball point pens.

Tip 8 – Excise tax on gasoline was 3 cents per gallon in 1956. Today the Federal Excise Tax Rate has grown to 18.4 cents per gallon.

Tip 9 – Public Law 880 went into effect August 1, 1956 and extended the Social Security benefit to self-employed lawyers, dentists, osteopaths, veterinarians, naturopaths, chiropractors and optometrists. 

Tip 10 – The IRS issued Revenue Ruling 56-186 that put forth guidelines for deductible travel expenses where business and pleasure were combined.

Tip 11 - In 1956 admission to scholastic or collegiate sports events were subject to a federal admissions tax unless the entire gross proceeds went to benefit of a hospital for crippled children.  A Revenue Ruling issued in 1956 stated that a charitable dental clinic for children did not qualify for this exemption.

Tip 12 - The federal government got 13 cents for every deck of cards sold.

Tip 13 - Back in 1956 there was an excise tax on hunting shotgun shells and cartridges, including reloaded used shells.  The IRS ruled in 1956 that if a used shell reloader received spent shells from someone, reloaded them and returned those exact shells to that person then this activity would be exempt from the excise tax.

Tip 14 - When you look at a bottle of imported beer (or any imported alcoholic beverage) you will find that it has information on the American distributor.  This is a requirement of a revenue ruling issued by the IRS in 1956.