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Notes on English usage - its and it's
It's a problem that arises because of its use, or not, of the apostrophe. This is something that confuses many people, and it's not just learners of English who fall victim to its difficulties.
I have used both "it's" and "its" twice each in the opening paragraph, to show you how they differ in meaning. A teacher I had many years ago used to say that an apostrophe was a tombstone for a departed letter - a bit morbid, perhaps, but in most cases this is true.
How to use the apostrophe
An apostrophe is used when a word has been shortened by leaving out one or more letters, such as in "Lucy's car's crashed and she's been taken to hospital". In the case of "car's" and "she's" it is easy to work out what is missing, as the full version would be "car has" and "she has". However, "Lucy's" is an indication that what follows is something owned by Lucy, so what could be missing? If you go back a few hundred years it was common for people to write "William his book" rather than "William's book", so "hi" is missing; but Lucy is a woman, so changing "Lucy her car" to "Lucy's car" means that my old teacher's tombstone theory needs a bit of tweaking!
Going back to "it's" and "its", the apostrophe is still a tombstone, because the full version is "it is", and you should usually use the full version when writing anything official or formal, except when reporting what someone has said. "Its" is a possessive pronoun, as are "his" and "hers".
If you wonder which to use, remember that you would never write "hi's" or "hers" as a possessive pronoun, so you don't use "it's" either.
Also remember that "it's" is always short for "it is" or "it has" (as in "it's been great to meet you"), and never short for "it his"!