The problem with dialogue tags is that everyone who has been professionally/traditionally published, and has been successful at it, has different opinions on how to properly use dialogue tags. Michael A. Stackpole, for example, often argues (on the Dragon Page and elsewhere) that dialogue tags are pretty much pointless, and that having them in your prose can create unnecessary clutter. Others, such as Stephen King, say that the only dialogue tags you should use are "he said/she said." There are a myriad of opinions on this subject and none of them are necessarily correct. Much of what matters when it comes to dialogue tags is based on personal style. I very much doubt that readers care whether you use "he said/she said" or no tags at all; the folks who tend to care most about that are writers themselves with particular tastes in how things should be done.
But is there a right way to do it?
The way I've come to see dialogue tags is that they're generally unnecessary. There's little reason to have "he said/she said" primarily because it should be pretty obvious who is speaking in your prose. If your characters are distinct individuals, and you throw in useful description around your dialogue to help differentiate who is talking, why would you ever need "he said/she said"? We don't say "he said/she said" in the real world. We just say it.
That being said, if you're going to use dialogue tags, stick with the standard ("he said/she said"). Anything else is amateur at best (such as "he replied" or "she spat" or he grumbled"). If your character is doing something a certain way, show it to us rather than telling us about it. Dialogue should have a flow to it. I personally have a lot of issues with dialogue, but removing unnecessary dialogue tags helps a great deal.
If you decide to use dialogue tags, keep them simple. Clogging your prose with antiquated terms and pointless descriptive language to make your dialogue seem more interesting will ruin the feel of your story. And that's a big no-no if you want to keep the attention of your audience.
What about all you readers? What do you do with your dialogue and why?
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