Filing Canadian and US Taxes, being Canadian Permanent Residents

1) Yes, if you file jointly in the US, you would have to report your worldwide income the IRS. I would not recommend this. Filing jointly reduces your tax on the US side, which does nothing to help you in Canada. Canada generally has higher tax rates than the US, and your ultimate tax liability is to Canada. So even if you reduced your income to ZERO on the US side, you would still be taxed on your worldwide income in Canada and pay tax to CRA. This would just overcomplicate things. 

2) You are a non-resident of the US and by the sounds of it, a resident of Canada. You need to make your financial institution aware of this by completing W-8BEN form. This will allow them to apply the Canada US tax treaty, reduce the tax you pay to the US and they will withhold the necessary non-resident tax at source. You will have no obligation to file a US tax return. In the US, you essentially will pay NO tax on US interest income or capital gains (unless derived from real estate) and 15% on dividends. This income would be fully taxed on your Canadian return and you would get a foreign tax credit for the tax withheld at source (if applicable). Generally speaking, foreign investment income does NOT get any favourable tax treatment in Canada. For example, foreign dividends are fully taxed and you don’t get a dividend tax credit for them, etc. Of course you would need to convert to Canadian $. 

3) Interest income is NOT taxable in the US as a Canadian resident and US non-resident via the treaty (it’s “resourced” as Canadian source income). Simply report on your Canadian return in Canadian $ and pay tax to CRA.

4) TFSA income is fully taxable to US citizen in US. IRS does not recognize the tax shelter. They also consider them foreign trusts requiring form 3520 and 3520-A to be completed. Very onerous. I would think about your spouse closing her TFSA. 

5) You should not file a US return. Your wife’s US return and Canadian return should be completed together at the same time WITHOUT ANY FOREINGN TAX CREDITS and then you do a “second pass” to include the necessary foreign tax credits in both Canada and the US. Keep in mind that some income is “resourced” via the Canada/US tax treaty and this can get very complicated. 

I really encourage you to have someone with cross border experience assist you with this.

Thanks for the response. My company had helped me file taxes for 2018. Since I had income in US and Canada in 2018, we filed a married filing jointly. My wife (US Citizen) does not have a TFSA. I (Indian Citizen) have a TFSA. Do I still need to fill out 3520 Form? I have not been able to find a good Tax professional who could help. In your opinion, can I use TurboTax and "Do it on my own"? Or perhaps take help from one of their tax professionals?

You have no requirement to file the 3520 form or report the income from your TFSA to the US. You are not a US citizen and you are a resident of Canada. You should have no need to file a US return. Even if you some how meet the IRS Substantial Presence Test based on the rolling 3 year calculation, you can use form 8840 to eliminate the need to file a US return or the treaty tie breaker rules if you were in the US for more than 183 days in 2019 (which by the sounds of it you were not).  

You should be able to use Turbo Tax to complete the returns. You might just have to add some "fake forms" to input everything correctly. I'm not very familiar with their software. I'm just not sure I would rely on one of their professionals, unless they have one with cross border experience.