This sentence can also mean "Do you shave now?", commenting on whether the person has started growing facial hair, or if the person has started shaving due to, for example, a lifestyle change.
Both would work for either meaning. But I agree that in the cases described in my previous comment, "теперь" would work slightly better.
"Are you now shaving" sound right to me, any ideas of why it was marked as wrong when i entered it?
it seems to me that the transitive verb would be "shaving (someone)" and the reflexive verb would be "shaving (yourself)" or "getting a shave".
is the "now" really necessary in the english sentence? The present continuous tense already express that it is happening right now. Not yesterday, not tomorrow, not the whole week. So don't we just translate it as "are you shaving"?
"Now" is just as necessary as "сейчас". If the Russian sentence uses the word, then it's best that the English one does too.
Anyway, it does change the sentence slightly, mostly the emphasis. Say the two of you are leaving for a dinner party later that day. You might ask, "are you shaving?", which would imply "are you shaving before we leave?", or you could say, "are you shaving now?", which would imply more like "are you shaving now instead of right before we leave?".
Basically, it emphasises the "now".
@TheFinkie. - Excellent explanation. I completely agree with you. - We want to learn Russian here. Some people seem to forget that sometimes - for a moment. :-)
Why "Are you shaving?" is not ok. I do not think you have to add "now" with present continuous in English to get the meaning of an action that is currently ongoing