Correct me if im wrong, but from reading comments on similar phrases it would seem that "read" should actually be interpreted as English past tense. If it was to be interpreted as English present tense, the Spanish phrase would be written in 'present progressive' form as "tú estas leyendo" meaning "you are reading" which can only be interpreted as present tense in English. Definitely confusing when reading the phrase in english with homonyms
(I'm native Spanish) "usted/ustedes" is used in more or less the same cases that French "vous", German "Sie" or Italian "Lei", its a respect form used when you speak to an older person or your boss, for instance. The person used for verbs is the 3rd (as for él/ella): yo leo / tú lees / él/ella/usted lee / nosotros leemos / vosotros leéis / ellos/ellas/ustedes leen. Finally, the "tú" can be omitted in most cases like in Italian (unless Duolingo decides otherwise ;)) Use it only when you want to stress the fact that you are addresing to that person or to avoid ambiguous sentences. For instance, "¿Lees un libro?" is a normal question, but if you say "¿Tú lees un libro?" you are somehow showing you are very surprised that the person is reading a book. Another example: "Yo leo" is almost as if you added "(what you never do!") In normal cases I never use the pronoun. Anyway, as a German teacher of mine always said, "Übung macht den Maister", I mean, practice is the only way to catch all these subtlenesses...
Note that "usted/ustedes" use the 3rd person unlike "tú" that uses the 2nd. Unfortunately for English learners, every person has its own form in Spanish... ;) (and also in French, German or Italian) In fact that's one of the reasons why I love English, because English is way more efficient using the pronouns instead of having a bunch of different forms for (almost) every person.