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Can you write off is chatgpt subscription tax deductible business expense?

TL;DR

A ChatGPT subscription can be a deductible business expense if it is used primarily for business purposes, such as research, content creation, or customer interaction. However, personal use of the subscription may limit the deductibility.

Detailed Answer

The expense is deductible if the ChatGPT subscription is used to directly support business activities, such as generating content for marketing, assisting with customer service, or conducting research relevant to the business. If the subscription is used for both personal and business purposes, only the portion attributable to business use is deductible. For example, if a freelance writer uses ChatGPT to draft articles for clients, this would be a deductible expense. However, if the subscription is used for personal entertainment, that portion is not deductible. It's important to allocate the expense based on the percentage of business use.

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 to generate creative ideas and draft client proposals. The designer pays $240 annually for the subscription and uses it 80% for business purposes. They can deduct $192 (80% of $240) as a business expense on their Schedule C.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible amount, determine the percentage of business use of the subscription. Multiply the total subscription cost by this percentage. For example, if the subscription costs $240 and is used 80% for business, the deductible amount is $240 x 0.80 = $192.

Audit Risk & Documentation Tips

The audit risk is moderate. To support the deduction, keep detailed records of how the subscription is used, including logs of business activities performed using ChatGPT. Save receipts and any relevant business communications or documents that demonstrate the business purpose of the subscription.

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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