Question: When do we use it’s, and when do we use its?

When we mean it is or it has, we use it’s. (Contraction)

• It’s a beautiful day. (It is)
• It’s been raining all day. (It has)
• Sometimes it’s hard to get up in the morning. (It is)

When we talk about something that belongs to it, we use its. (Possessive: Its challenge).

• The documentary discusses Japan and its temples.
• The computer is broken.  Its hard-drive does not work.
• A new bank has been started in the community.  Its services include free checking and online banking.