Newborn married taxes?

our baby girl was born 12/19/07 and i was wondering if we can claim her this tax season? should we file jointly or seperatley? we live with his mother but pay half the bills(incl mortgage payment) everything(including home) is in her name only. wondering what deductions we qualify for, husband self employed newspaper route(no taxes taken out of pay throughout last year) i'm stay at home mom. also, husband received 16,000.00 gift that went through his bank account, then he transferred it to his moms bank account to pay down payment on home. we did not use any of the money for personal use, wondering if that could effect our taxes this yr. we receive government benefits (WIC, TANF, Food stamps) b/c we don't make enough and no good jobs avail. in our area(we've looked a long time) sry if confusing we might need a good tax person. just wondering any info would be most helpful:)