As far as I know ,the sentence " It is two years since we last saw each other." has the same meaning with " We haven't seen each other for two years." "It's " in this sentence is contracted from " It is" .The present simple is used here because "two years" is a fact. And the structure " It is + (period of time ....like two months/3 years....) since + ( a point of time ) can only be transformed with the structure with present perfect followed by ..(for + a period of time ) ,not the one with"since" For example : I have two sentences: The first one is " I haven't heard from her for two months" This sentence is equal with " It is two months since I last heard from her. And the other " I haven't heard from her since we last saw each other" .This sentence can't be transformed into the structure mentioned above with " It is ..." Such sentences like the second one (I mean "the present perfect" with "since") often have subjects are doers not something impersonal like "it" in " It is..." structure mentioned above.

It has been (= it's been) two years since we last saw each other. That would be standard English. You will hear things like " It is (it's) two years since we last saw each other. " This wouldn't be standard English, but the person who would say this sentence probably wouldn't care about using "standard" English.

-it's=it is and also it's=it has (this is not possessive though) -"its" is the possessive form of the pronoun "it" In the example you mentioned above, it can be written in two ways: 1) It's (it has) been two years since we last saw each other. 2) It's (it is) two years since we last saw each other. Hope that helps :)

Hey Misaru, Hope you're enjoying your weekend. Contractions can be very confusing alright if you're not sure what they stand for. First of all, both "It's two years since we last saw each other." and "It's been two years since we last saw each other." are both correct. So no, don't worry :) Your teacher certainly hasn't given you wrong information. In the FIRST sentence, "It's two years..." the contraction stands for It + is In the SECOND sentence, "It's been two years..." the contraction stands for It + has The second sentence is using the present perfect "It has been two years..." and would be more typical in British English. The present perfect is used for an action that began in the past and continues up until now. The action is this case is the two people not seeing each other. The first sentence is using the simple present "It is two years..." and is more typical in American English. American English uses perfect tense a lot less than British. It's certainly not WRONG! But British people might think is sounds a little strange. Hope this helps!