Taxes can feel like a mystery, and for many, they’re scary. Add in a military transition, accidental landlord, or a side hustle, and it’s easy to feel overwhelmed. But understanding your taxes and planning ahead can make a huge difference, not just in your wallet, but in your peace of mind.
In this episode, Forrest Baumhover shares his journey from Navy to financial planner to online educator, and how he’s helping people confidently tackle their taxes. We dive into the most common tax mistakes, why planning matters year-round, and what service members should know about building their next chapter after military life.
Forrest Baumhover began his career right out of high school by joining the Navy. After working as a hospital corpsman, he pursued a degree and transitioned into a role as a supply corps officer, handling logistics, fuel, and finances. Around the 15-year mark in his career, Forrest created two career paths for himself—one to stay in the military and one for civilian life. Eventually, he chose to pursue financial planning, inspired by his experiences helping others navigate financial decisions during his military service.
Helping People Understand Taxes
Today, Forrest helps individuals better understand their finances, with a particular focus on taxes. He has a YouTube channel dedicated to simplifying tax forms and helping people make sense of often intimidating paperwork.
When it comes to tax forms, Forrest says the ones that cause the most confusion are the W-4 and W-4P. These forms determine how much tax is withheld from your paycheck or pension. Many people get stuck because they are unsure if they are withholding enough, which can lead to an unpleasant surprise come tax season.
More technical forms, like those dealing with foreign tax credits or limited partnerships, are trickier but less common. The majority of the questions Forrest receives are from people who just want to avoid owing money at tax time. He encourages people to use the IRS Tax Withholding Estimator, a free online tool that helps figure out if you’re on track with your current withholdings.
Related: How to Make Your Military Taxes Ready
Filing Taxes: Should You DIY or Hire Help?
Forrest sees taxpayers falling into three broad categories. Some prefer to hire a professional, whether it’s a local tax preparer or CPA. Others navigate tax software on their own, like TurboTax. And a smaller group still fills out IRS forms manually, the old-school way.
While it’s possible for many to handle taxes themselves, Forrest emphasizes the peace of mind that comes with having a professional involved. Even though he’s an enrolled agent, he hires someone to double-check his own taxes each year. Having someone to call if an audit letter ever shows up can be worth the investment.
The IRS partners with tax software providers to minimize mistakes, but the IRS itself offers free fillable forms for simple tax situations. However, Forrest notes that the platform can be clunky and isn’t always beginner-friendly.
Related: How to Prepare for Tax Season 2024
Why Year-Round Tax Planning Matters
One thing Forrest wishes more people understood is that your actual tax bill is not just whatever refund or amount owed shows up at filing. Most people pay tens of thousands of dollars in taxes through withholdings over the course of a year, but only think about the small amount left at filing time.
He encourages people to focus on the bigger picture and to do proactive tax planning throughout the year. Tax planning meetings during the summer or fall can help people adjust their withholdings, explore options like Roth conversions, or find ways to lower their tax bill next year.
The key is thinking beyond April 15. Waiting until tax season to think about taxes often means missed opportunities for savings.
Thoughts on Proposed Tax Changes
When asked about recent discussions around eliminating income taxes for those making under $150,000, Forrest advises caution. Big announcements often come with second and third-order effects that aren’t immediately obvious. Even if a major tax change sounds good on the surface, there would likely be ripple effects elsewhere, such as new taxes on businesses or changes to other systems.
Forrest’s general approach is to wait until new laws are officially passed before worrying about how to adjust.
Advice for Service Members Transitioning to Civilian Life
Forrest’s military-to-civilian transition wasn’t linear, and he encourages other service members to expect the same. He planned to run his own financial planning firm, but his path shifted multiple times—from starting his own firm, to joining another firm and becoming a partner, to selling his stake and launching his online education platform.
He stresses that designing your own path will come with unexpected changes, highs, and lows. Flexibility and a willingness to adapt are key. Hanging in there through uncertainty is crucial, and while the traditional contractor path may seem safe, building your own future can ultimately be more rewarding.
Resources
- Teach Me Personal Finance
- Teach Me! Personal Finance YouTube
- Tax Withholding Estimator
- IRS.gov
- Atlas Shrugged by Ayn Rand.
Wrapping It Up
Forrest’s story is a great reminder that transitions aren’t always smooth, but with a clear plan, adaptability, and the right resources, success is achievable. Whether you’re figuring out your taxes or designing your next career move after military service, the key is being informed, staying flexible, and not being afraid to ask for help when you need it.
MILMO Show Sponsor
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