02 — Industry Landscape & Competitors

Market structure, TurboTax's position, and who competes on what.
Sources: research/SOURCE_INDEX.md — [S2][S3][S4][S5]

Market structure — three tiers

US individual tax prep splits into three broad ways to file:
1. DIY software (TurboTax, H&R Block Online, TaxAct, FreeTaxUSA, Cash App Taxes) — self-serve, lowest price.
2. Assisted / hybrid (TurboTax Live, H&R Block's assisted/virtual) — software + a human expert; premium price, fastest-growing.
3. Full-service / professional (H&R Block retail offices, CPAs, EAs, Liberty/Jackson Hewitt storefronts) — a human does it for you; highest price.

Plus a free layer: IRS Free File (partner software for AGI ≤ ~$89k), Free File Fillable Forms, and each vendor's own "free edition." (IRS Direct File — the government's own filer — is gone for FY2026; see file 10.) [S13]

TurboTax's position

• ~60% share of US tax software, down ~1 pt YoY — dominant but slowly pressured. [S2][S3]
• Growth engine = assisted: new TurboTax Live customers up ~29% (Q3 FY26). Intuit is deliberately trading pure-DIY for higher-ARPU assisted. [S2]
• Retention is strong — only ~34% of TurboTax customers report considering alternatives (low churn vs. peers), helped by prior-year carryforward and brand trust. [S4]

The competitors

H&R Block — the #1 rival and the leader in assisted/retail. Q3 FY26 revenue ~$2.4B (+5.3% YoY) on pricing + assisted volume. In paid search it actually out-clicks TurboTax (HRBlock.com ~35.8% vs. TurboTax ~32.2% click share) — it competes hard on the "free" and assisted messages. [S5] Dual model (software + ~9,000 offices) is both a cost base and a moat.

TaxAct — mid-market value player; competes on price below TurboTax, steady.

FreeTaxUSA — disruptive low-cost: free federal, cheap state. Wins price-sensitive DIY filers; growing word-of-mouth.

Cash App Taxes (owned by Block/Square, formerly Credit Karma Tax) — free federal + state, mobile-first. Notably, Intuit sold Credit Karma Tax to Square as a condition of the Credit Karma acquisition — so Intuit's own former free product now competes with TurboTax.

IRS Free File partners — 8 trusted partners offer free filing to eligible filers; a low-margin obligation the industry uses partly to forestall a government filer. [S13]

CPAs / EAs / independent preparers — still handle a large share of complex/older/higher-income filers.

How they compete

• Price & "free" — the loudest battleground (and Intuit's biggest reputational liability; see file 10).
• Assisted / expert access — the current growth frontier; TurboTax Live vs. Block's assisted.
• Brand & trust — TurboTax's biggest asset; matters more here than in most software because errors carry penalties.
• Refund speed & advances — refund-advance loans and pay-with-refund are acquisition hooks.
• Ecosystem pull — TurboTax's tie-ins to Credit Karma/QuickBooks (file 09) are a lever competitors can't match.

Analysis — where Intuit is strong vs. exposed

• Strong: brand/trust, ~60% share, the assisted growth engine, unmatched ecosystem + data.
• Exposed: the "free" flank (FreeTaxUSA/Cash App undercut on price; reputational scars), and — the big one — AI collapsing the DIY guidance moat (file 11). H&R Block's assisted strength means the premium tier is contested too.