A little bit easier to deal with than the triple threat of they're, there, and their are several two-word conundrums. Today, we'll talk about its vs. it's.
It's is the contraction for it is or it has. To test to see if it's is correct, read your sentence substituting it is or it has for it's. If it sounds right, it is. Keep it's.
Its, however, is a pronoun and signifies possession; it owns something. If it is or it has doesn't make sense, chances are you want to use its. To confirm this, think about whether your sentence is talking about something belonging to it or owned by it. If it does, its is correct.
For more information, see Dictionary.com's definition of its and its discussion of how it's confused with it's.
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