How do I introduce a quoted clause within an independent clause?

How do we introduce a quoted clause within an independent clause?
For example, when talking about why we say, "John passes away or passed away." How do we write it in a sentence?

My sentence starts off as the following:

1. We normally say "John has passed away or John passed away."
   Or I should write it as follows?
2. We normally say, "John has passed away, or John passed away," rather than "John passes away."

Do we use a comma before John, or colon, or do we write it as in sentence #1?