HI,

I came to U.S on October 2007 from India on L1 Visa with my wife and kid.

I like to know which form I have to use to file my returns. Also let me know whether I can claim any exception for my wife and kid as my dependents. They don't have any other income.

Let me know if you need any more information.

You can file resident tax return as Married Filing Jointly.
You will have to wait for 5 months to file your tax return till you meet the Substantial Presence Test in 2008.
You will get standard deduction of $10,700 and exemptions for both of you and the kid. You will also get child tax credit of $1,000.

IRS Publication 519: Tax for Aliens

Depending on the income level and whether you have moving expenses, it may be better to file as a non-resident alien, because the combination of your personal exemption, itemized deductions and moving expenses MAY completely offset your income.