Hmm...well, I know the answer to the sperm one, at least! If you are itemizing your deductions, and your medical expenses came to more than 7.5% you can include sperm as a medical expense. The full list is here: http://www.irs.gov/publications/p502/index.html
. A note to everyone--apparently after December of this year the amount will go up to 10% of your total income, which sucks. Probably not on shipping, but I'd be inclined to give it a try anyway.
As for claiming Sara--my guess is that she made too much money last year. You probably need to follow up more than on this article, but here's a start:
(if you go back to page 2 it lays out the rules for claiming her as a relative and says that she had to make less than $3700 gross for 2011). If she made less than that you can claim her and she doesn't have to file herself, to my knowledge.
And thirdly, since i'm on About anyway, only the legal parent can claim the kiddos for you this year:
. I have ZERO idea what happens next year if Sara can be your dependent who gets to claim the new baby--it could be that you can since they're both dependent on you, but since I'm not a tax professional, I wouldn't necessarily listen to me. For 2011, though, it's at least pretty clear.