It’s or its?

I keep getting this wrong even though I know the rule – I just often don’t pay attention.  The reason this is confusing to many people is that we’re taught to use apostrophes to show possession, which most of the time is true.  Such as:

‘Karen’s computer.’

If, however, Karen were a gelatinous green blob with no features and we didn’t know her name or anything else about her, we might refer to her as ‘it’.  In which case there is no apostrophe:

‘Its computer.’

With ‘it’, you only use an apostrophe when it’s short for ‘it is’ or ‘it has’.  Such as:

‘It’s swallowed all the other office workers.’

I hope that’s cleared it up and is helpful to people.