I think I have been doing this all wrong. Logging activity

I just realized after reading someone else's post that I have my settings at moderate activity and been logging all my exercise. I have wondered why I haven't been loosing with how active I am and having decent deficits. So I went in and changed my settings to sedentary and will log my activities. I am confused what to do now. I am a 42 yr old female, 5'6" and weigh 156 and want to be 145. CC put me at 1200 calories. That seems so low. So will I eat more to keep a deficit around 500 cal a day?

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