When any of the following occur in your writing, you need to start a new paragraph:

• You introduce a new idea: This applies mainly to essay writing where each main point in support of your argument should have its own paragraph.
• A new character is introduced: Whenever someone new enters a story or whenever the focus shifts from one character to another, you need to start a new paragraph.
• You begin to discuss a new event: Whether you are writing a short story or discussing historical events in an essay, each unique situation should have its own paragraph.
• The setting changes: When writing short stories, you need to start a new paragraph whenever your story moves to a new location.
• A new person begins speaking: This is essential when you are writing dialogue for a short story. Start a new paragraph whenever the speaker changes even if the previous person only spoke a few words. 
• Time moves forward or backward a lot: Whenever there is a major time shift in your story or essay, you need to start a new paragraph.