it's means "it is". It is really not difficult, just pretend you are Data and swear off contractions.

Here's a shortcut: test if you could drop "his" into the same spot and have it make sense. (And of course you'd never write hi's or his's.) If "his" would work, "its" would work.

My keyboard is very keen on completing "it's" regardless of context. I imagine this is the case for most people, since usually I see "it's" when "its" would be correct.

I also think it's difficult to know that "it's" is wrong to use because it feels like it follows the common apostrophe for possession rule:
"Australia's capital is Canberra" -> "Australia is the largest country in Oceania. It's capital is Canberra." (wrong, but intuitive)