This is a pretty common phrase found in writing, and I wanted to make sure that we are on the same page when I refer to it in later chapters.
Dialogue tags are one of the most common elements of writing. Basically, their job is to attribute speech to a specific character. In a higher sense, they can help order the scene by providing where/when and supplying context to what's being spoken. Dialogue tags are more than just he/she said. Carefully inserted, they can also be used to help imitate speech patterns.
Here's a dialogue scene missing tags:
"How's the business?"
"Pretty good."
"We're not here for chitchat. The night's fading and we've got a job to do."
"There's six hours until sunrise; we'll be fine."
"Says the man with nothing to lose."
In this case, there are three speakers. You can probably figure out the first three lines on your own (one per person) but the last two lines are completely up for debate. Did Speaker 1 or 2 go next? And then did Speaker 3 or Speaker 1 or 2 (depending on who you picked in the above line) reply?
Now, if you're really good with dialogue or your characters sound really different (say Speaker 1 is British and uses different vocabulary; speaker 3 swears every other word or something), you could make this scene understandable without a single tag.
But a lot of beginning writers, even a lot of experienced writers, haven't quite gotten there yet, and sometimes no matter how a character might sound, they say something so generic it can be attributed to anyone. On Wattpad, I see a lot of dialogue that could have been said by any character because all characters sound the same. Without the tags in those stories, I literally can't tell who is saying what.
So, to fix our scene above to make it clear who is speaking and when, we need dialogue tags.
But we aren't going to rush in and add a he/she/Name said to every line. There are times where you can skip a tag. Let's cover that first.
You don't need a tag every time someone speaks! Often, if there are only two speakers, it is okay to go a couple lines (think three max, maybe four) without a tag. Most people can easily read three or four shifts without trouble. Once that number gets up past five, however, the rate at which people get confused jumps considerably. All it takes is one interruption, one glance away from the page to swat a mosquito or to greet their mom, and the reader can lose their spot and the speaker.
You want people to read parts of your story over because they're really good, not because they got lost, confused, or don't understand something.
Some good advice for short bursts of non-tags between two people: make sure it's clear who is speaking first. If the reader knows Bob definitely spoke first, they'll immediately be able to understand that Sarah replied. If it's unclear whether Bob or Sarah spoke first, then you'll run into the same problem as having no tags.
A perk of having small bursts of dialogue with no tags is that it reads quickly. To streamline your story, you don't always want to waste a couple sentences on useless detail. Provide the information and move on.
Here's an example of non-tags between two people:
"There's a rotisserie chicken in the fridge."
"Thanks."
"An hour at 375 should do it. Call if you have a question. Your father and I will be home by ten."
Caution: the longer the dialogue, the more you may need to insert a tag. If everyone's speaking three or four [long] sentences at a time, it can be a little easier to forget who is speaking, since you're giving the reader a lot more context to recall.
You don't usually need a tag at the end of a paragraph if the speaker is obvious.
...Mark spread butter on the toast. There wasn't any apricot jam left, but his stomach felt a little upset anyway. Butter was probably the safer choice. "You think Burke'll excuse me if I barf on his Air Jordans?" [he asked.]
"Not a snowball's chance in hell. Dude's practically a drill sergeant."
"Yeah, you're right."
"Hey, it's just one mile. You've got this."
This is a case where you could have [the extra tag], but you don't need the extra tag since it's clear that Mark is the speaker. In this instance, where you have perfect clarity, whether or not to include it becomes an issue of flow. Does it sound better to your writer's ear with or without it?