It isn’t always easy to remember whether you need the apostrophe. Here’s the difference: Its is a possessive pronoun meaning belonging to it, while it’s is a shortened form of it is or it has. It can be confusing because most words use an apostrophe to indicate possession (e.g. “Mary‘s bike”), which can lead to some confusion between these two words. However, not all possessive pronouns follow this pattern. For example, your, his, her, and its don’t.
Its indicates possession, and appears in front of the noun it describes. If you hear “The hotel raised its rates,” you know that the rates belong to the hotel.
You’ll often hear it’s in casual speech. Here’s an example from Stephen Chbosky’s The Perks of Being a Wallflower: “Have you heard of a thing called ‘Secret Santa?’ It’s this activity where a group of friends draw names out of a hat, and they are supposed to buy a lot of Christmas presents for whatever person they choose.” In this example, it’s means it is, and it refers to Secret Santa. Without the contraction, the passage would read “Have you heard of a thing called ‘Secret Santa?’ Secret Santa is this activity….” The contraction keeps the sentence short, simple, and easy to read. It also makes it sound more like natural, real-life speech. You can also use it’s when you aren’t referring to a specific noun, as in “It’s a beautiful day” or “It’s raining.”
It’s can also be a contraction for it has, as in “It’s got to be finished today.” In this case, it’s got is a contracted form of it has got. In more formal speech, you would use it has. Keep in mind that even in informal writing, you should use helping verb (like been or got) when it’s is short for it has.
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