J.M. NORTHUP

Another problem area I often see while reading and editing is related to commas and periods. There seems to be confusion as to how to use them with dialogue tags and action beats. Below I’ve attached a great video based on the Chicago Manual of Style as well as one of the best explanations I’ve found:

This was so well said that I wanted to share it:

• Dialogue tags: Dialogue tags are punctuated with commas and double quotation marks. Notice the difference between the placement of quotation marks and commas when the dialogue tag comes before or after the dialogue. Quotation marks always go outside the punctuation, regardless of whether it’s a comma, exclamation point, or question mark. When the tag follows the dialogue, the first word of the tag is lowercase, unless it’s a proper noun.
  • “I’d like that piece of chocolate cake,” she said.
  • She said, “I’d like that piece of chocolate cake.”
    
• Action beats: Action beats are punctuated with periods (or other terminal punctuations like exclamation points or question marks). Again, the punctuation goes inside the quotation marks. The action beat is its own sentence, so it should be capitalized accordingly.
  • She smiled. “I’d like that piece of chocolate cake.”
  • “I’d like that piece of chocolate cake.” She smiled.

https://www.rabbitwitharedpen.com/blog/writing-dialogue-tags-action-beats-punctuation