In these examples, ✓ indicates correct punctuation, while Ⓧ indicates incorrect punctuation. All examples conform to The Chicago Manual of Style, 17th Ed.
Definitions
Dialog tags are phrases which describe how dialog is said. Here are examples: "she said", "he yelled", "they asked".
Action beats are phrases or sentences which describe an action taken by the character. Here are examples: "scratching his chin", "She sat down.", "They slammed their fist on the table."
Action beats and dialog tags can be combined. Here is an example:
"I want it now!" he said, slamming his fist on the table.
Basics
✓ “A comma follows a complete sentence that would end in a period inside of quotes if what follows is a dialog tag,” he said.
✓ “If the sentence inside the quotes ends in a question mark or exclamation point, then you do not add a comma!” he shouted.
✓ “Dialog tags should only be capitalized if the dialog tag begins with a proper noun, like a person’s name!” she said.
Ⓧ “Dialog tags should only be capitalized if the dialog tag begins with a proper noun, like a person’s name!” She said.
Note: When the dialog ends with an exclamation point or a question mark, auto-correct will capitalize the first word of the dialog tag. You must undo this.
Breaking Up Sentences
✓ “If a sentence,” he said, “is broken up by a dialog tag, then a comma goes after the first sentence fragment and after the dialog tag.
Ⓧ “Do not break.” He scowled. “A sentence up with another sentence, only a dialog tag, though the dialog tag may have an action beat as well.”
✓ “You can break,” she said, rubbing her nose, “a sentence up with a dialog tag and an action beat so long as the dialog tag is included.”
Action Beats
✓ “If a sentence and not a dialog tag follows the quoted sentence, then each sentence is treated separately and receives its own punctuation.” He rubbed his nose. “No commas are used.”
Dialog Tags
✓ “Dialog tags describe how the speech is said. If the action which immediately follows the closed quote does not describe how the speech is said, then it is not quoted,” she shouted.
Ⓧ “This is an example of an incorrect usage of a comma because the ‘dialog tag’ does not describe how the speech was said,” he fidgeted.
✓ “The example immediately above should be punctuated as shown here.” He fidgeted.
✓ He said, “If a dialog tag comes before the quoted speech, then the comma comes at the end of the dialog tag.”
Quoted Quotes
✓ “Mary told me that ‘if something is quoted in quotes, then the inside quotes are replaced with single quotes,’” John said.