In most areas in the US, it is traditional for children to go trick-or-treating on the evening of Halloween (October 31st). This means that they put on a costume and go door to door asking for candy.
If you put up Halloween decorations, or you have your porch light on, people will assume that you welcome trick-or-treaters and will be annoyed with you if you don’t give them candy. If you have no Halloween decorations and turn your porch light off, most people will leave you alone (but you will probably get a few obnoxious people trying to demand candy anyway, and possibly a few kids who don’t understand that rule).
When you give out candy at home on Halloween, it’s considered acceptable to wear either a costume or normal clothing. If you wear a costume while giving candy to trick or treaters, make sure that it is not sexually suggestive. (Suggestive costumes are ok at Halloween parties for adults, and are likely to be considered ok on the street, but they’re not ok to wear if you’re interacting with children.)
The expected candy to give out is miniature (“fun-sized”) candy bars or other small, individually-wrapped candly. You can get bags of appropriate Halloween candy at grocery stores, drug stores, and many other kinds of stores before Halloween. Candy you give out needs to be individually wrapped because most children are taught that it is dangerous to accept unwrapped candy. Most children are also taught that it is dangerous to accept homemade treats.
Do not invite trick or treaters inside. Children are taught that it is dangerous to go into a stranger’s house.
(A partial exception: In some communities it is considered acceptable to set up a haunted house in your home and invite trick or treaters to walk through it. Figuring out whether or not this is ok is complicated, and it is easy to get wrong and end up seeming really creepy. It’s the kind of thing that’s only likely to be ok if you’re in a neighborhood where people know each other, you are friends with the parents in the neighborhood, and kids already spend time in your house. Don’t do it if nobody knows you.)
The easiest way to distribute candy is to keep a bowl by your door and to drop a piece into each trick or treater’s treat bag. One piece of candy is enough; people will be pleased if you give more than one piece. Some people let kids pick their candy from a bowl with a variety of candies in it. If you do this, some kids will take more than one piece, and it’s best not to get too upset or confrontational about it. (If you can’t tolerate kids doing that, it’s better to just put the candy in their treat bag yourself, which is considered completely acceptable.)
It’s ok to compliment costumes. It’s considered rude to say anything critical about them. If you can’t tell what someone is dressed as, it can be ok to ask, but you have to be careful about tone. (“Who are you?” or “What are you dressed as?” is more likely to be ok; “What are you supposed to be?” is likely to be heard as insulting, especially if you sound annoyed.)
It’s probably better to err on the side of not calling a kid’s costume cute, because kids who are old enough to understand what cute means are often sensitive about not being perceived as little kids. If you want to compliment a costume, “cool”, “creative”, “pretty”, and “beautiful” are more likely to be appreciated. Or something specific, eg “Wow, I love superheroes!” or “That’s an awesome shade of blue.”
Be careful about assuming gender – some kids dressed as Batman might be girls, and some kids dressed as unicorns might be boys. (Eg “What a lovely Rainbow Dash costume!” is better than “What a lovely girl!”).
Trick or treaters are often accompanied by parents. It’s not considered necessary to give candy to parents. When teenagers take children trick or treating, it’s good to also give candy to the teenagers (especially if they are wearing a costume). It’s no fun to watch younger siblings get candy without getting any yourself.