My child is not much older than yours and was the same way in terms of learning letters/sounds and recognizing words at a very early age. I realize I'm posting this on a gifted forum but I don't think my child is unusually smart and I think it's probably very common for 1-year-olds to pick these things up easily given how much exposure young kids have to words and letters in the environment and books.
I do like to teach and in terms of teaching reading, I recently read a book that focused on the importance of writing in learning to read so in addition to helping my 2-year-old learn to sound simple words out with fridge magnets and recognize words in books when she points them out and asks what they are, I have put a little more effort into teaching my child how to write letters when she is playing with crayons. However, we just do this when she shows interest and it's a small part of our day.
I found it helpful to learn about a variety of milestones (fine motor skills, gross motor skills, cognitive) to get ideas of what kids the same age or a little older should be doing and when I want to teach DD something I try to focus on age-appropriate things that she hasn't mastered yet like learning to cut with scissors, learning to clap to the rhythm of a song, learning to ride a tricycle and more developed pretend play. I enjoy teaching my child and I do try to teach reading but it's not a very big focus at this age because although DD is interested in words learning to read is not something DD is begging for right now and she has so many other things to learn.
