Can I Write This Off?

Can I deduct can i write off chatgpt as a business expense?

TL;DR

Yes, you can generally deduct the cost of ChatGPT as a business expense if it is used for business purposes, such as research, content creation, or customer service. Ensure that the use is ordinary and necessary for your business operations.

Detailed Answer

The cost of ChatGPT can be deducted as a business expense if it is used primarily for business purposes. This includes activities like generating content, conducting research, or automating customer interactions. The expense must be both 'ordinary' (common and accepted in your trade or business) and 'necessary' (helpful and appropriate for your business). If ChatGPT is used for both personal and business purposes, only the business-use portion is deductible. For example, if you use it 70% of the time for business, you can deduct 70% of the cost. Ensure that you document the business use to substantiate the deduction.

Where to Put It on the Tax Form

Schedule C, Line 27a for 'Other Expenses'.

Real World Example

A freelance writer subscribes to ChatGPT for $20 per month to assist with generating article ideas and drafting content. Since the tool is used exclusively for business, the writer deducts the full $240 annual cost on Schedule C, Line 27a.

Calculation Required

A calculation is required for this deduction.

If ChatGPT is used for both personal and business purposes, calculate the percentage of business use by dividing the time or usage attributable to business by the total time or usage, then apply this percentage to the total cost to determine the deductible amount.

Audit Risk & Documentation Tips

Audit risk is moderate. To defend this deduction, keep records of the subscription cost, usage logs demonstrating business use, and any related business correspondence or projects. Save receipts and document how the tool is integrated into your business operations.

IRS Reference

IRC §162, IRS Pub 535

Relevant Industries

FreelancersConsultantsContent CreatorsTech Startups

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 15, 2025

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