You can Tag a contact by going to Contacts > My Contacts, clicking on the Name of the Contact, then once entering the profile, click on See more Details and see your Tags in the first tab Contact Details displaying first by default. You can add one or several Tags by clicking on Add Tag. You need to type your Tag in Type to Search and then create it.
All your Tags will be reflecting in the part Tags. See below:
To remove your Tag, just click on Remove, the small cross next to the Tag.