@JulieS described it well because you understood the greater part of it.
Yes, you will add up the Crypto that you earned each month and convert it into US dollars. You correctly stated that this is your yearly income.
Yes, please save the spreadsheet. It is critical if the IRS asks any questions.
The statement "Later when you sell or convert the crypto, your basis will be the amount you reported as taxable income. " means that after you've converted the cryptocurrency value into dollars, you can use that value as the amount you paid for it if you sell, trade, exchange or spend it.
In finance, basis is generally used to refer to the expenses or total costs of an investment. The "basis" can be deducted from the proceeds value (the amount you sold it for) when you get rid of it. This will reduce your tax.
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