It’s a common confusion – how on earth do I punctuate dialog? Punctuating dialog is the same as punctuating any sentence, isn't it? You put the end punctuation at the end of a sentence? Except with dialog, even if it’s not the end of a sentence, you still might put in end punctuation, but then you need more end punctuation, and ... it’s a confusing mess. The key is this: in dialog you are punctuating complete and separate sentences. Take this example:
“Mary, I really like you.” The boy reached for the soda and poured a glass.
“Mary, I really like you” and “The boy reached for the soda and poured a glass” are both complete sentences. There’s a period after “I really like you” and the first word of the second sentence is capitalized, just as you’d expect.
Most people intuitively punctuate both sentences separately. Only those who are thinking about “some rule” they learned back in high school, about how a comma comes right before the end quotation mark, mess this up. But really, it makes sense. If the sentences are separate, if each can stand on its own, then you punctuate them like two distinct sentences.
Now for the sticky comma. Where it goes and why. Another example:
“Your beard is looking good today,” Mary said to Miss Maven.
“Your beard is looking good today” IS a complete sentence, but “Mary said to Miss Maven” is NOT a complete sentence. Said what? Huh? Mary said something? It’s what is called a Dialog Tag. Like a Christmas gift with a tag telling you who it’s from, the Dialog Tag tells you who said something and (sometimes) how it was said. The stuff in quotes is the gift. The “said whoosibuts” is the tag.
Correct: “I like cheese,” said Marty.
Incorrect: “I like cheese.” Said Marty.
“Said Marty” doesn’t make a lick of sense all by itself because it’s not a complete sentence. So, the “gift” (the “what is said”) part of the sentence is not punctuated as a complete sentence either. You can’t separate the tag from the gift or you won’t know who gave it to you. That’s why you use a comma.
This is pleasantly complicated when the thing that is said is a question or an exclamation.
“I love cheese!” screamed Marty. AND “Do we like cheese?” screamed Marty.
You have a dialogue tag (screamed Marty), so there is really only one sentence (“screamed Marty” can’t stand alone), but you have no comma because of the exclamation point and question mark. The dialog itself is punctuated to show the emotion or question, and the end punctuation is a simple period.
Some more examples:
Correct: “Martha Stuart, I’ve had it!” Cindy cocked the gun and aimed it at Martha’s chest. Two separate sentences, no dialog tag. Both sentences are punctuated individually.
Incorrect: “Martha, you are too much,” Cindy squinted past the glow from Martha's blowtorch at the exquisite gold-foil centerpiece. Two separate sentences, no dialog tag. These should be punctuated individually, with a period at the end of the dialog instead of a comma. Fix: “Martha, you are too much.” Cindy squinted at the exquisite gold-foil centerpiece.
Correct: Herbert didn’t know how long he’d waited. “What time is it?” he asked. Even though the dialog ends in a question mark, it is followed by a tag, so the “he” isn’t capitalized. This shows that the tag goes with the “gift.”
Incorrect: Herbert twiddled his thumbs. He glanced at the clock. “What time is it?” He finally asked. “He asked” can’t stand on it’s own. Even though there is a question mark (end punctuation) just after it, “he” should not be capitalized. Fix: Herbert twiddled his thumbs. He glanced at the clock. “What time is it?” he finally asked.
Correct: “We gather together on this blessed occasion,” the pastor droned. Dialog tag, one sentence. Comma and lower case.
Correct: “We gather together on this blessed occasion.” The pastor paused to sip from a cup beneath the podium, then continued by saying, “The joining of these two kids who really should have known better.” First sentence is not followed by a dialog tag. Second sentence (“The pastor ...”) becomes a dialog tag for the dialog that follows it, and so it ends in a comma.
Incorrect: “Why, Cindy, is that thing real?” She asked over the deafening alarm bells. “She asked” is a dialog tag and shouldn’t be punctuated as a separate sentence. Fix: “Why, Cindy, is that thing real?” she asked over the deafening alarm bells.
Correct: “Why, Herbert, is that a new style from Spain?” She glanced down, then back up to his eyes and smiled sweetly. “Or did you forget your pants?” No tag; all three are separate sentences and are punctuated independently.
Correct: “Velma, my dear,” he intoned, “you are a sore for sight eyes.” Dialog tag interrupts a sentence. Separated off with commas.
Correct: “I see you haven’t been taking your medication,” Velma quipped. “You really should seek help, Daryl. Professional help.” Tag applies to the first phrase of dialog. The second phrase is a new idea/thought/sentence. Period comes after the tag in this case.
Oh, and as an aside, do avoid using intoned and quipped and such. Said is almost always best. Unless you're being silly.
The Secret of Platform 13 by Eva Ibbotson. Dutton, 1994. 
