These two are commonly confused. Here are the rules:
‘It’s’ is short for ‘it is’ or ‘it has’.
‘It’s been a long time coming.’
‘It’s not you, it’s me.’
‘It’s a massive hot air balloon shaped like Darth Vader’s head.’
‘It’s rather intimidating.’
‘Its’ is used as the possessive: when something belongs to the ‘it’ in question.
‘The jury has reached its decision: the guy in all the sellotape is not the real Iron Man.’
‘The dog chased its tail.’
‘Its colour was unexpected.’
‘The group changed its name.’
Could you put ‘it is’ in the sentence instead? Then use ‘it’s’. Could you put ‘him’/’her’ in the sentence? Use ‘Its’.
I’d love to hear from you if you have a good way of remembering this, any questions or good examples!