I've always been confused by the Catholic/Protestant dispute regarding justification. Are we justified by faith, works, or both?
 
As Catholics, we believe that good works do not guarantee, but do play a role in our final salvation. If the initial stage of justification is in question, then our good works have no part to play. As the Catechism of the Catholic Church states: “Since the initiative belongs to God in the order of grace, no one can merit the initial grace of forgiveness and justification, at the beginning of conversion (2010; emphasis in original)”.  St Paul deals with initial salvation in Ephesians 2:4-5: “But God, who is rich in mercy, out of the great love with which he loved us, even when we were dead through our trespasses, made us alive together with Christ (by grace you have been saved).”  Paul is speaking of that initial transition from death to life in Christ. And it’s this initial stage of salvation where Paul thinks good works play no role: “For by grace you have been saved through faith; and this is not your own doing, it is the gift of God—not because of works, lest any man should boast”. (Eph 2:8-9) However, Paul then refers to the ongoing (Rom. 3:23-24, 5:8-9) and final stages of justification (Rom. 6:16, Gal. 2:16), when works do play a part: “For we are his workmanship, created in Christ Jesus for good works, which God prepared beforehand, that we should walk in them”. (Eph. 2:10) 

Notice that Paul excludes works only regarding that initial stage of salvation/justification. After we’re initially justified, then we must carry out the good works that God wills for us.  St. James teaches the same about the corporal works of mercy: “You see that a man is justified by works and not by faith alone (James 2:24)”.  We also know that works pertain to our  final justification, since Jesus teaches in Matthew 25:31-46 that the determining factor for those who go to heaven or hell are those who did and did not do the corporal works of mercy.