And now time to recap October's data. The U.S. economy grew at a slightly faster-than-expected annual rate of 2% in the third quarter; and higher than the second quarter's 1.7%, according to a preliminary report on GDP from the Commerce Department.  Dean Baker of the Center for Economic and Policy Research notes that the boost came from a $115.9 billion rise in inventories, the largest increase in inventories since the $117.2 billion gain in the first quarter of 1998.  Unfortunately, with limp final demand from consumers who are laden with debt and scared of losing their homes, this may not go too far.  However, consumer spending did go up by 2.6% compared to 2.2% the previous quarter.

ISM's Manufacturing Prices Index for October rose to 56.9% from its September figure of 54.4% signaling a continuation of the recovery that began 15 months ago.

The jobs report comes out tomorrow.  Experts are saying we may be looking at the addition of just about 60,000 jobs in October, keeping the jobless rate at around 9.6%.

As for the stock market, Standard &Poor's 500 rose by 3.5% last month, its best October in seven years. For the month, the gains totaled 3.1% for the Dow Jones Industrial Average and 5.9% for Nasdaq.

On a side note, only because this one tends to be an all-time favorite at our house, especially with the kids, Chipotle Mexican Grill (CMG) stocks jumped to an all-time high and are up by 140 percent for 2010! Seems like the burrito has surpassed the burger as America's favorite casual dining meal and eating healthier may actually have something to do with it.   

Dos and Don'ts of 2010 Year-End Tax Planning

Don't forget to take required minimum distributions from IRAs and tax-deferred retirement plans:

When you reach age 70 ½, you're generally required to start taking required minimum distributions (RMDs) from IRAs and employer-sponsored retirement plans. The penalty for not taking RMDs for the current year before December 31 is 50% of the amount that you're required to withdraw.  However, you have until April 1^st of the following year if it's your first withdrawal, when you turn 70 ½.

Do exercise Tax-Loss Harvesting:

In a portfolio with taxable securities, Tax-Loss Harvesting can provide an important tool for reducing taxes now and in the future.  Securities that are valued below their cost basis can be sold and the capital loss can be used to offset current or future capital gains, thus minimizing the impact of taxes to the net return of your portfolio.  A capital loss can also be used to offset up to $3,000 of ordinary income.  Michael Schwartz, the dean of Wall Street options strategists, says investors can consider selling stocks with major gains and paying the current long-term capital gains tax rate of 15% without giving up the chance to make even more money in the stock that was sold. Point to note: be cognizant of the wash-sale rule.

Don't forget to take advantage of the tax credit for energy-efficient home improvements:

A 30% tax credit is available in 2010 for the cost of energy-efficient improvements to your primary home such as insulation, qualifying windows and doors. The credit was available for 2009 as well and an aggregate cap of $1,500 applies for both 2009 and 2010. So, if you claimed the full $1,500 in 2009, you won't get any benefit from the credit in 2010. If you haven't utilized the full credit though, it's something to consider as the end of the year approaches.

Do consider a Roth conversion:

Special rules apply to 2010 Roth conversions: If you convert funds in a traditional IRA, you can report half the income that results from the conversion on your 2011 federal income tax return, and half on your 2012 federal income tax return. Or, you can elect to report all of the income that results from the conversion on your 2010 federal income tax return. Roth conversions aren't right for everyone, but if you're thinking about doing a Roth conversion, it's worth considering pulling the trigger before year-end to take advantage of the special rules.

Do consider making a charitable donation to your favorite charity

In 2010, there's no limit on itemized deductions but starting in 2011, people earning over $100,000 are likely to see their deductions limited. So give to your favorite charity and local organizations; they've been hit hard by the recession as well and can most certainly use a helping hand.

Like all tax related decisions, you should always consult your tax advisor to ensure that these strategies are feasible for your particular tax situation.