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Punctuation with Quotations and Dialogue

Generally use a comma at the end of the quoted statement before a tag line:
“Hi there, George,” Mary called from across the room.

If the dialogue continues with a new sentence after the tag line, end the tag line with a period:
“Hi, George,” Mary called from across the room.  “Did you bring me a present?”

However, if the tag line interrupts a complete sentence, use a comma on either end of it:
“Wait a minute, George,” Mary yelled, “because I’ve got to find my car keys.”

If a bit of dialogue ends with a question mark or exclamation point, then that punctuation dominates over the usual comma.  However, the tag line is still considered part of the same sentence and should not be capitalized unless there’s a proper noun involved:
“Get down from there!” my mother yelled.
NOT: “Get down from there!” My mother yelled.

Sometimes this gets confusing because dialogue can sometimes stand alone without a tag line, when the speaker has already been established, and sometimes a separate sentence can seem like a tag line.  For instance:

“Honey, you’re up a little too high in the tree,” my mother called across the yard.
I climbed further, ignoring her worry.  It was so great up there in the tree with the whole world spread out below.  I could even see the freeway, almost a mile away over the houses of the neighborhood.  The cars looked like Matchbox toys, and I waved happily from my perch.  Below, however, my mother’s anxiety increased.
“Get down from there!”  My mother yelled at me from what seemed like a great distance.  I could, in fact, hardly hear her.

This last paragraph could just as easily have been:
            “Get down from there!” my mother yelled, but she seemed so far away that I could hardly hear her.

Sentences within dialogue should be punctuated just like regular sentences unless you are making a point about how uneducated or sloppy your speaking character is.

NOT ACCEPTABLE:

“Don’t worry I’ll be fine,” she said.

“What’s your problem—it’s not a big deal tomorrow is another day,” he said to his friend.

“I understand, you are having a problem with me, it’s not really a problem though.”

ACCEPTABLE:

“Don’t worry.  I’ll be fine,” she said.

“What’s your problem?  It’s not a big deal.  Tomorrow is another day,” he said to his friend.

“I understand.  You are having a problem with me.  It’s not really a problem, though.”

Dialogue comes in all the above forms, which are referred to as direct dialogue, meaning that it represents ostensibly the exact words of the speaker.  However, you may also use indirect dialogue, if you’re not sure or it’s not important what the precise words were; in order to vary the pattern and rhythm of your writing; and/or to retain narrative control of the voice of the piece of writing:

The last paragraph from the tree climbing story above, for instance, might be:
            My mother by now was yelling at me to get down immediately, but she seemed so far away that I could hardly hear her words.

The impact, is, of course, different, with this last version emphasizing the mother’s distance rather than her hysteria.  The narrator’s experience is more about the tree-climbing and less about his mother’s reaction in this case.

With both direct and indirect dialogue, you should make sure to use tag lines unless you have set up a rather long exchange between two characters or individuals in which the tag lines can be dropped because understood and used only occasionally as a reminder.

NOT ACCEPTABLE:

            When Mary Jones opens her front door to leave for work every morning, she always peruses the neighborhood as she leaves, because she worries about crime.  “So much can happen if you are not vigilant.”  There are usually children waiting for the school bus, but sometimes she notices a strange car or an unknown individual, and if so Mary takes careful notes.  She is really more interested in solving crimes than in preventing them.

ACCEPTABLE:

            When Mary Jones opens her front door to leave for work every morning, she always peruses the neighborhood as she leaves, because she worries about crime.  As she puts it, “So much can happen if you are not vigilant.”  There are usually children waiting for the school bus, but sometimes she notices a strange car or an unknown individual, and if so Mary takes careful notes.  Even she admits that she is more interested in solving crimes than in preventing them.

[Notice the drastic change in tone with the change in the last sentence of this paragraph.  Whether she says it or it’s the author’s opinion makes a huge difference in how we perceive Mary.]