Yes of course. The W2 is the most basic form you can enter. You enter the W2 and any 1099 you get and Turbo Tax fills out the 1040EZ or 1040A for you. You are preparing the 1040 return. That is your tax return you file with the IRS.
There are 3 kinds of 1040 returns, 1040EZ, 1040A and the full 1040. The Free Edition only prepares the first 2. If you need the full 1040 or need to enter Deductions you need to upgrade to Deluxe. You can enter a W2 into the 1040EZ and 1040A returns.