"seeing $12,280 as other income on line 8 on the 1040."
Line 8 on the 1040 comes from line 10 of Schedule 1 (1040). Please go to Schedule 1 and tell us what numbers are in which lines (i.e., line 1-7, lines 8.a though 8.z). This will tell us where the $12,280 is coming from.
"Am I getting this penalty because I'm filing married filing separately? "
That's not clear. How did you enter your return? Did you enter information about you and your spouse as if you were going to file Joint, then switched to Separate? That causes a lot of leftover data in your return which can confuse everything. Or did you enter only the most minimal amount of data about your spouse?
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