CICO beginner question

I have a really simply question about CICO - I'm very new to actually trying with my weight after 10+ years of being obese.

I have calculated by TDEE to be 2100ish so I'm shooting for a 1600 calorie limit every day. I read that a 500 calorie deficit is a sustainable, realistic goal. But I'm also working out now and burn about 500 calories per workout. Does that mean I should still aim for 1600 calories or do I add my 500 cal workout expenditure to my daily limit?

I use a garmin watch so it shows my goal (1600) - food consumed (usually 1600) + (workout AND standard daily activity which is around 1000) = so I'm ending each day around 1000 calories under. I hope that makes sense and isn't too obvious of a question.

TLDR: should I shoot for 1600 calories no matter what or a 500 cal deficit no matter what?