Form W-2 is the annual "Wage and Tax Statement" that reports your taxable income earned from an employer to you and to the Internal Revenue Service (IRS). The form also includes taxes withheld from your pay, as well as Social Security and Medicare payments made on your behalf by both you and your employer. Box 1 on the W-2 reports your total taxable wages or salary, and Box 2 reports how much your employer withheld from your paychecks for federal income taxes.