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.    

The information reflected in this article was current at the time of publication. This information will not be modified or updated for any subsequent tax law changes, if any.