You'll owe income taxes on the net income (1099 payments less business expenses). If you aren't withholding from other sources (like pension or SS or IRA distributions) and if you don't meet any of the safe harbor rules, then you'll need to set up quarterly estimated payments with the IRS to avoid underpayment penalties. Google "estimated payments site:irs.gov" for details.
You might need to make quarterly estimated income tax payments, but you won't need to report anything to the IRS quarterly. You'll just complete a Schedule C and Schedule SE. This assumes a sole proprietorship; if you have a more complex business structure there may be reporting requirements.
Usually if the 1099 income is less than your required expenses, which it sounds like is the case, then yes, most people just spend the 1099 money first and then take from other sources as needed.
Whether or not to contribute to an IRA is a tax strategy question. If, for some reason, you find that you might be in a lower income tax bracket later, then a contribution to a traditional IRA might make sense. If you had more income than you needed to spend, then shoving some of it into a Roth would make sense to keep any gains tax-free.
HTH.