Its - it's

• Its = of it
• It's = it is. It's is a contraction: see apostrophe (omission).

David Marsh (2013) has a witty example of the distinction between its and it's: "the difference between a company that knows its shit [an informal compliment to professional knowledge] and a company that knows it's shit [a strong, if informal, condemnation]".

You may like to see also AWE's note on the verb to be.