When you become new to the tax system in the United States, you could be wondering what's W-2? W-2 is a tax form used by an employer to indicate how much money was paid to an employee and the taxes withheld for the year. The w-2 form is not the tax report form used by a contractor because it is usually based on wages. When looking for more information regarding the form in Spanish, you could also come across the term w-2 formulario. It is useful to know what to look for in your w-2 form as the figures will affect your yearly tax return.