As long as you still have some income from your 1099, you will still file a Schedule C for your self-employment income and can make all of the normal deductions, SEP contributions, etc. that are allowable based on that income (and ONLY that income).
You would just report your W2 income on your 1040 in the appropriate place.
I have used a part-time W2 job before as a tax payment vehicle, so I wouldn't have to deal with quarterly payments. I had them hold out way more taxes than I would need for the W2 wages in order to cover the taxes I would owe for my self-employment income. It can be useful. :)
Of course, that part-time job also came with some really nice benefits. I'm not sure I would do it for W2 with no benefits, unless there was a HUGE difference between what they would pay me and what I pay myself as a SE person.
Edited to add: Also agree on TurboTax. They really do a good job with the whole SE + W2 income thing -- but you do pay for those capabilities.