Can I Write This Off?

Is is chatgpt subscription tax deductible business expense a valid tax write-off?

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. Personal use of the subscription must be minimal or non-existent to qualify for a deduction.

Detailed Answer

The cost of a ChatGPT subscription is deductible if it is ordinary and necessary for your business operations. For example, if a freelance writer uses ChatGPT to generate ideas or drafts, or a consultant uses it to enhance client interactions, the expense is deductible. However, if the subscription is used for personal entertainment or non-business-related activities, it is not deductible. The IRS requires that the expense be directly related to your trade or business and not lavish or extravagant. If the subscription is used for both personal and business purposes, only the business-use portion is deductible.

Where to Put It on the Tax Form

Schedule C, Line 27a

Real World Example

A freelance graphic designer subscribes to ChatGPT for $20 per month to assist in generating creative content ideas and drafting client proposals. The designer uses the subscription exclusively for business, making the entire $240 annual cost deductible on Schedule C, Line 27a.

Audit Risk & Documentation Tips

Audit risk is moderate. To substantiate the deduction, keep records such as subscription receipts, usage logs, and documentation showing how the subscription supports business activities. If the subscription is used for both personal and business purposes, maintain a log to justify the business-use percentage.

IRS Reference

IRC §162, IRS Pub 535

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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