Writing good dialogue is hard, but formatting it is easy. Dialogue, which is always mixed case, single-spaced, typically runs margin to margin and follows the character name on the next line. A blank line follows between the dialogue and the next character's name. A formatting program will do the spacing and margin adjusting automatically for you.
COWGIRL The hamburger is ten feet tall. COWBOY It's not there. COWGIRL I know, but it's dripping fat, and it's sizzling. It's on a sesame bun, and you can just see some onion sticking out. There's a dab of ketchup on the onion. Maybe it popped out from under the bun. It's winking at me.
Sometimes stage directions interrupt dialogue, but each adheres to its own formatting rules. See below.
COWGIRL Piece in your teeth. (She puts the finger with the fragment of the mystery meat into her mouth. She instantly spits it out.) Ugh! Why'd you tell me it was beef?
If a character's dialogue is interrupted by a page break, and continues onto the next page, you repeat the character name set-up on the next page with the (cont'd) remark after the name. This is what formatting software was made for!
LADY SHAKESPEARE And he fed the dog! Yeah, the dog ... I don't know ... No ... That population's on the ups every day, and we're gonna' get buried in garbage else ... That's why he's feedin' the dog ...
At the top of the next page:
LADY SHAKESPEARE (cont'd) Don't tell me different. No, no, no ... (She sees Ben.) There's little trash babies, all kinds, eatin' their lunch out of a garbage pail. I just know the Trash Man's comin'. Who thrown their babies to the garbage?
When a character walks offstage while speaking either notate this as part of the stage directions, or alongside the character name if the character is already offstage. You may write either "Offstage" or "Off."
BAXTER Yeah. Sure. (Baxter exits to the kitchen. Off) We mostly talk sports when he calls, 'cause he's into that. Talk a little wrestling, a little football - he's a linebacker. Not a real good team - I snuck over to see a game once. They're small. Josh is real fast. If they had some other real fast kids they might be good. But now football's almost over and it's time for wrestling.
HOLLY (off) You still have to bandage it.
When one character interrupts another, use double dashes (--) or an em dash (a long dash) to show that the speaker is being cut off. Below, I make use of an em dash. No need to write "interrupts."
HUGO If my Dad said we're moving just like that - CHARLIE You'd move. Hold this cone (holds out the ice cream cone) a sec?
Using ellipses ( ... ) does not signify that a character has been interrupted, but rather that she hesitates or trails off of her own accord. For example, in Shining Sea, Pac can't bring himself to ask a question:
PAC Would you ... ? CANDY Would I what?
Occasionally, the actor's emphasis on a particular word may be so important that you want to write that direction into the script. While there is no ironclad rule for this practice, italicizing the word to be emphasized works best (underlining or capitalizing the word is both confusing and cramping). To use italics successfully, do not overuse them. Below is an example:
WENDY You do? But she's my hallucination.
Sometimes characters speak at the same time. The rule of thumb is to divide your page into two columns, placing the character names within their individual columns. Indent any stage directions 1" instead of 2".
FLYER MAN Only diamonds do the trick. Only diamonds do it. Say it with me: only diamonds do it. Say it. FLYER MAN BEN Only diamonds do it. Only diamonds do it.
Writing Tip: Make sure to punctuate very carefully. Through careful punctuation, and not by giving them line readings, is how you tell the director and the actor how your characters speak. A comma means something different than a period. Ellipses mean something different than an em dash. A period and a question mark make big differences in an actor's inflection. Control the rhythm of your play through the punctuation.