We are justified by faith alone, but not by a faith that is alone. It is imperative that we keep both the teaching of Paul and James in balance. We cannot fall into works righteousness, trying to earn merit before God and thus justify ourselves. When Paul says that we are not justified by works, he means that we do not earn any merit before God by our works. When James says that we are justified by works, and not by faith only, he is referring to the evidence of our faith before men.
True faith is the working out of love.
Examine your own life for the kind of fruit described in these passage from 1 John.