People often get confused when trying to decide whether to use its or it's.
It's is a contraction for "it is", and not a possessive form of it.
Its — without the apostrophe — is the possessive form (like "his", "hers" or "theirs") of it, and can be loosely translated as "of it" or "belonging to it".
When trying to decide which to use, just remember this: it's is the same as it is. It's is a contraction like don't or won't. Only use it's when you are trying to abbreviate it is. In all other cases, use its (without the apostrophe).
Comparison chart
 | It's | Its |
|---|---|---|
| Meaning | Abbreviated form of "it is" | "Its" is the possessive form of "it". So "its" means "belonging to it" |
| Etymology | Contraction of "it is" | Combination of "it" with possessive ending 's. Written with an apostrophe until the 1800s, when it was dropped presumably to make it more similar to hers, yours, theirs, etc. |
Examples of Its vs It's
- It's a shame that the civilized world still faces the problems of starvation and war.
- The United States is proud of its strong tradition of freedom of speech.
- This computer learns from its mistakes and becomes better at playing chess.
- He soon realized it's in his best interest to plead guilty.
- The earthquake was felt by most residents of the city but it's still unknown what its magnitude was.
Limerick
Here is a limerick that was submitted in our comments section:
"It's" is a contraction, where apostrophe's the norm. Lo, it's not to be taken for a possessive form of the pronoun "it"---now gather your wits: its possessive form is unapostrophized "its". -- Michael E. Skinner
You're 
Their 
Double Quotes 
Affect 
Their
Comments: It's vs Its