With tax returns due in America this week, check out these mistakes commonly made by British expats according to an expat tax advisor.

Hopefully this will help you to avoid them:

1. Filing late

In England, this may cost you £100, but in America you will be charged 5 per cent (4.5 per cent late filing, 0.5 per cent late payment) of what you owe for each month or part-month that the tax remains unpaid up to a maximum of 25 per cent. It is far better to file on time and pay an estimated amount rather than none at all.

2. Failing to file a P85 with HM Revenue and Customs in the UK

If you forget to notify the HMRC when you have left the country, you may continue to be taxed in the UK. Make sure that you keep them informed and who knows – you may be one of the lucky ones who receives a tax refund!

3. Forgetting to file form NRL1 with HMRC in the UK

If you don’t submit this form, you will be taxed on any income from property rentals in the UK. Having this form in place means that you will receive all of your rent.

4. Finding out you could have paid less US taxes by filing a different way

Different tax rates apply to different categories of people: single, married, resident, non-resident, first-year election, etc. Try different categories to see which generates the least tax.

5. Miscalculating your payroll withholdings

Unlike in the UK where you are assigned a tax code to determine the correct deductions from your wages, in the US you are expected to work this out yourself and then file a W-4 with your employer. If you overestimate, you will pay too much and get a refund at the end of the year. If you underestimate, you will have back taxes to pay.

One final recommendation – do not rely on tax software programs because they do not cover international issues in sufficient detail.

For more information on tax planning, contact The Overseas Guides Company to speak to a recommended tax advisory company: OGC@overseasguidescompany.com.

For details of property for sale in the USA, visit the American listings on Rightmove Overseas.

To understand the full step-by-step process to buying a property in America, collect The Overseas Guides Company’s ‘USA Property Buying Guide’