Can I Write This Off?

Can you write off can i write off chatgpt as a business expense?

TL;DR

ChatGPT can be written off as a business expense if it is used primarily for business purposes, such as research, content creation, or customer service. Personal use of ChatGPT is not deductible.

Detailed Answer

The cost of using ChatGPT is deductible as a business expense if it is ordinary and necessary for your trade or business. For instance, a freelance writer using ChatGPT to generate content ideas or a consultant using it for research can deduct the subscription cost. However, if ChatGPT is used for personal purposes, that portion of the cost is not deductible. It's crucial to differentiate between business and personal use, especially if the tool is used for both. If ChatGPT is used in a mixed-use scenario, only the business-use portion is deductible, which requires a reasonable allocation method, such as time spent or usage logs.

Where to Put It on the Tax Form

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

Real World Example

A freelance graphic designer subscribes to ChatGPT for $20 per month to help generate creative ideas for client projects. Since the tool is used solely for business, the designer can deduct 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 business and personal purposes, calculate the deductible portion by determining the percentage of business use. For example, if 70% of the time spent using ChatGPT is for business, then 70% of the subscription cost is deductible.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed records of how ChatGPT is used for business, such as logs of usage, project notes, or client communications. Save receipts or invoices for the subscription. If claiming a mixed-use deduction, document the method used to allocate business versus personal use.

IRS Reference

IRS Publication 535, Business Expenses; IRC §162

Relevant Industries

FreelancersConsultantsContent CreatorsMarketing Professionals

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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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