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Tax Deductions for AI Expenses


Content provided for general information. Talk to your advisor to learn about recent updates or other rules that may apply to your situation.

Yes, using AI tools in your business is tax-deductible, but there are a few rules you should be aware of for both using AI tools and making new ones.

Tax Deductions for Using Existing AI Tools

If you subscribed to any sort of artificial intelligence tool or service, that's generally going to be deductible the same as any other software or service you use in your business.

Business expenses are deductible when they're ordinary and necessary. Remember, ordinary and necessary basically means that it serves some kind of business purpose and isn't a personal expense.

Don't get caught up in wondering whether using AI is "ordinary" or whether it's "necessary" to use it in your business. If using a non-AI tool or service to do the same thing would be deductible, the rules don't change for AI.

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