It is probably most advantageous for you to file jointly with your wife, filing Form 1040 with Form 1116 to claim the Foreign Tax Credit. Form 1116 is required because you must claim ALL world-wide income earned in 2012, and the Form 1116 allows you to claim a credit for the income taxes paid to your home country.
You will need to apply for Individual Tax Identification Numbers (ITINs) for your wife and child by submitting Form W-7, and that process has undergone some radical procedural changes this past year. Instead of the simple notarization process, the IRS now requires that your home country certify the photocopy of your passport as a true copy. This is due to rampant fraud in the ITIN submission process. The notaries simply cannot tell the difference between a fake passport and the genuine passport.
This certification can be done by the Indian (I assume you are from India) embassy in Washington, D.C. or at one of the consulates in San Francisco, Chicago, Houston or New York. Assuming you do NOT want to drive there, you need to call the nearest consulate and arrange to have this process done via the mail. This process, done via mail, can take up to three months to complete. My clients to date have had the best results by mail with the San Francisco consulate, getting the certified passport photocopies in less than 3 weeks.
Also, the IRS recently announced the opening of Tax Assistance Centers through which you may be able to submit the tax return, Form W-7 and passport photocopies IN PERSON without having to get the photocopies certified by your home country consulate. The list of the TACs are at the link below:
Taxpayer Assistance Center Locations Where In-Person Document Verification is Provided
The alternative is to mail in the actual passports themselves, something most of my clients are reluctant to do.