Go to the person's profile. You can get there by finding them on the main profile's listing page (People > People).
If the person has already been tagged with one or more labels, the labels will appear under the person's name at the top of their profile. To add a new label, click on the blue plus sign at the end of the label list. You'll be prompted to select a new label to add.
If they don't have any labels yet, click on the option to Add Labels and fill out the form that opens to add label(s) to the profile.
Note: To remove a label from a person's profile, click the blue plus sign near the labels listed at the top of the person's profile. In the window that opens, click the X next to the label(s) you want to remove.