I've worked as a freelance solo dev (sadly for far less than $500k/year) and the difference between my revenue and profit was close to zero. Expenses included accountancy costs and the occasional new laptop or whatever bit of hardware I could justifiably call a business expense, but it was a tiny fraction of my revenue.
It means you are not "expensing" or deducting everything possible. Technically, yes, your only expenses are a laptop. But a good account will find way more: home office, legible meals or travels, investments, etc.. This should reduce your tax bill. You should never pay over 10% total, otherwise you are not maxing the system.
But if you assume as I do that your time is the most valuable thing you have, then there’s no way to generate profits when all you sell is your time.
You can generate cash, sure. But profits as in selling something for more than it cost you, never. You can never get that time back, and it’s worth more than anything.
I would guess many will disagree with this perspective.
If you're a solo freelancer, there's no difference between paying yourself for your time and paying yourself out of the profits. The money goes to you either way.
I've worked as a freelance solo dev (sadly for far less than $500k/year) and the difference between my revenue and profit was close to zero. Expenses included accountancy costs and the occasional new laptop or whatever bit of hardware I could justifiably call a business expense, but it was a tiny fraction of my revenue.