Income you receive from your business activity represents your gross revenue as a self-employed individual. From your gross revenue you will deduct expenses you incur to generate your income. Your net income (i.e. gross revenue less expenses) is taxable income subject to both income tax and self-employment tax (if in excess of $400).
Generally, income you earn through your business is treated as income from self-employment. Accordingly, you have two tax issues to worry about. First, to the extent your net profit (i.e. gross funds received in excess of your expenses incurred to produce the income) exceeds $400, you will be subject to self-employment tax. This tax is calculated on Schedule SE (http://www.irs.gov/pub/irs-pdf/f1040sse.pdf) which is attached to your 1040. Second, all of your net profit from the self-employment activity is considered to be taxable income. You report your self-employment activity on Schedule C (http://www.irs.gov/pub/irs-pdf/f1040sc.pdf) which is attached to your Form 1040.
You also should be paying Federal estimated income taxes (i.e. income and self-employment) on a quarterly basis. Consider reviewing IRS Pub 505 at http://www.irs.gov/publications/p505/index.html. You need to either calculate your liability and pay in 1/4 each quarter at the mandated times (i.e. 4/15; 6/15; 9/15 and 1/15) or you can pay in 100% of your prior year liability as a safe harbor to prevent the application of underpayment of estimated tax penalties. You do this by completing form 1040-ES (http://www.irs.gov/pub/irs-pdf/f1040es.pdf) and sending in a check with each voucher. You may avoid underpayment of estimated tax penalties by paying in 90% of your current year tax liability or 100% or your prior year tax liability. AZ has a similar regimen to pay AZ income tax on your business income using form 140ES (http://www.azdor.gov/Forms/2007/140ES-2007_f.pdf).
I also recommend you take a look at the IRS small business website at http://www.irs.gov/businesses/small/index.html. It has a lot of valuable information.
Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.
Whatever you had to pay for out of your own pocket in order to be able to earn the money that you did, you may deduct. Health insurance premiums you pay while your self-employed is deductible as an adjustment to gross income on line 29 of Form 1040. You may only use this deduction if you do not have access to health insurance through another employer's plan.
I encourage you to read the references I cited above to better understand how to report your income and expenses.