I am calculating that my independent contractor tax percentage comes out to 47% tax. Can this be correct?!

[AmyT]

As an independent contractor, you will pay two kinds of tax on your tax return - income tax and self-employment tax.

Self-employment tax is assessed at 15.3% of your business profits.  This amount is equal to both the employer and employee portion of social security and medicare taxes.  As an employee, 1/2 of this amount would have been withheld from your paycheck and 1/2 would have been paid by your employer.  Since you are considered to be both the employee and employer when you are self-employed (as a contractor), you pay both portions of these taxes as self-employment tax.

If you know what tax bracket you are in, you can calculate the overall tax rate paid for your contractor business.  It will be your marginal tax rate (the rate of the tax bracket you are in) plus 15.3% (the self-employment tax rate).  It is possible to pay taxes as high as 54.3% of your self-employed income.