Key takeaways from Citi’s U.S. consumer tax survey

Investing.com -- Intuit ’s (NASDAQ:INTU) TurboTax continues to dominate the U.S. tax software market with a stable 60% share, Citi’s 2025 consumer tax survey revealed Wednesday.

While this reflects a modest 1-point decline from the prior year, Citi analysts see the overall market as steady, with potential for a late-season volume surge as more filers submit returns closer to the April deadline.

The survey, which captured responses from over 2,000 U.S. taxpayers, indicates that online filing remains the preferred method, rising to 57% of all filings.

Taxpayers also reported growing complexity in their returns, a trend that supports continued use of higher-tier services. Citi said this “should support volume growth thru the CY25 season,” particularly as IRS data showed a year-over-year decline in filing volume through late March.

“Tax complexity continues to trend higher for a majority of respondents, which should support product tier mix,” Citi noted.

TurboTax appears well-positioned to capture late-season activity, thanks in part to relatively strong user retention.

Only 34% of TurboTax users said they are considering alternative filing methods, versus higher churn across other categories. Citi views this as a signal of customer stickiness and sees room for share gains, especially in the assisted filing segment.

Live and full-service offerings from TurboTax are showing solid awareness, with 66% and 77% of respondents familiar with the respective services.

Upgrade intent remains steady, with 23% expecting to use TurboTax Live and 27% opting for full-service. While willingness to pay for these services has moderated, Citi believes Live is likely “priced more attractively for adoption.”

Interest in AI for tax prep is also rising. Citi found that willingness to use AI tools increased by 6 percentage points over the past year. Still, concerns around accuracy and data privacy persist.

The Wall Street firm expects Intuit Assist, the company’s generative AI-powered financial assistant, to be “primarily geared toward improving the customer experience and improving retention by preventing drop-outs mid-process.”

Citi reiterated a Buy rating on Intuit, citing signs of a “better-than-feared tax season” and noting potential upside to fiscal Q3 results.

Meanwhile, the IRS direct file program is gaining more attention. However, only 5% of respondents are planning to use it this year, up from 4% in 2024. While convenience is a leading driver of interest, 29% of survey participants said they do not trust the IRS to prepare their return.