Its vs It's
Quick answer: It's always means 'it is' or 'it has' — the apostrophe marks missing letters, not possession. Its (no apostrophe) is the possessive, like his or hers.
How to remember it
Expand it: if 'it is' works, write it's. If not, its.
Common mistake
'The dog wagged it's tail' — no letters are missing; use its.