Medical expenses do generate a tax deduction if:
1. you itemize deductions and
2. the medical expenses must exceed 7.5% of your Adjusted Gross Income.
If you hire a nanny, you will need to deal with the payroll taxes associated with the nanny's pay.
The Dependent Care Credit may be available if you hire a nanny.
In order to file as Head of Household, you have to have a dependent on the tax return; so yes, fiancé should put son on the tax return.
