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Darren Bonawitz
Darren Bonawitz attended Kansas State University where he majored in Electrical Engineering with an emphasis in Communication Systems.

Greg Elliott
Greg joined 1102 GRAND in 2008 where he has been active in attracting bootstrapping startups to Inc. 500 and Fortune 500 companies from around the region and the world

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In Light of Data Center Tax News, Cornerstone 360 Shares Important Tax Information for Kansas City Businesses Filing in 2012

Data Centers have been in the news recently as many legislators, company executives and lobbyists are pushing to get important tax exemptions and incentives for the companies and structures. Not only would these tax breaks encourage growth in the industry, but it would also have the potential to create local jobs while lowering the overhead costs of running the data centers.

The most recent news featured a proposed bill for Missouri, highlighted in this article from CBS St. Louis, which would require a minimum capital investment and the creation of at least 30 jobs in order for a data center to qualify for major tax breaks. Also seeking a data center tax break this month was Facebook, whose Oregon facility was subject to a huge tax bill that has since been reduced. If local and federal governments approve cutting these tax bills for data centers, local economies will more easily enter into a stable and prosperous position for future growth.

We know the data center industry isn’t the only one looking for tax assistance around this time of year. So, we recently met up with some of our friends at Cornerstone 360, who were more than happy to share some highlights and changes to the tax code to share with our clients and other businesses in Kansas City.

The IRS has been busy creating new rules, expanding old ones and letting others lapse. Below are some highlights that will affect the most people. If you have any questions about the items or if you are looking for some tax advice, please feel free to contact us at Cornerstone 360 any time. Our contact information is at the end of this issue.

Tax Highlights for 2011/2012

Payroll Tax Cut Extension
House and Senate leaders agreed to end their stalemate over extending the payroll tax break. Under the agreement, for the first two months of 2012, a 4.2% Social Security tax would continue to apply to workers’ pay (10.4% OASDI tax for self-employment income).

However, the agreement calls for new language to be inserted into the tax relief bill to prevent a potential payroll tax problem for employers. According to information provided by the House Ways & Means Committee, the revision would allow employers to withhold employee payroll taxes at 4.2% (instead of 6.2%) on all wages paid during the two-month extension period. If an employee’s wages during the first two months of 2012 exceed $18,350 and the payroll tax reduction is not extended for the remainder of 2012, an amount equal to 2% of those excess wages would ultimately be recaptured on the worker’s individual tax return for 2012.

Capital Gains
Congress extended the favorable rates of 15% for long term assets (0% for those individuals in the 10% or 15% brackets).

401(k) Contribution Limits to Increase in 2012
The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $16,500 to $17,000.

The catch-up contribution limit for those aged 50 and over remains unchanged at $5,500.

IRS Releases 2012 Standard Mileage Rates
The 2012 business mileage rate will continue to be 55.5 cents for business miles driven, the same as the adjusted mid-year rate.

Beginning Jan. 1, 2012, the rate for medical or moving purposes will be 23 cents and the rate for miles driven in service of charitable organizations will be 14 cents per mile, according to the IRS in a recent news release (IR-2011-116).

Due Date for 2011 Tax Returns is April 17, 2012
The due date for individuals (and partnerships) is April 17th this year. Once again, there is a Washington D.C. holiday on Monday, April 16th that is pushing the federal due date back another day. Kansas and Missouri are following the federal deadline.

New Form 8949 (for individual tax returns)
All capital asset transactions are now to be reported on the new Form 8949 with Schedule D. For sales of securities, your broker should have basis on the Form 1099-B you receive. We must now report your security sales based on the distinction of 1) sales with basis shown by broker, 2) sales without basis shown by broker, 3) sales not shown on Form 1099-B, and 4) sales with no Form 1099-B issued. A separate Form 8949 is required for each type.

Net self-employment income
Self-employed health insurance premiums no longer reduce self-employment income for purposes of calculating self-employment taxes. If you are self-employed and your spouse works for you, give us a call. We can discuss some alternatives.

Equipment Purchases
If you purchase equipment, you may make a “Section 179 election,” which allows you to expense (i.e., currently deduct) otherwise depreciable business property. For 2011, you may elect to expense up to $500,000 of equipment costs if the asset was placed in service during 2011. Note that for assets placed in service in 2011, taxpayers can expense all of their business equipment purchases under a provision giving taxpayers 100% bonus depreciation.

In 2012, the dollar amounts for §179 expensing are scheduled to be $139,000. In 2012, the bonus depreciation amount is scheduled to be reduced to 50%.

IRS Areas of Interest
Over the years, we see what the IRS is interested in as it relates to your taxes. Areas that pique their curiosity are areas such as large charitable donations, the office in home deduction, rental losses, deducting business meals, travel/entertainment, and claiming your auto in your business. Some other areas of interest are: businesses that are really hobbies, and of late, the IRS is very interested in whether you have a foreign bank account.

All of the above are valid when documented properly. Always keep your documentation, receipts, and other information that will back up any claim of deduction you may have.

Independent contractor or employee?
We have also seen an uptick in inquiries regarding whether Form 1099s were issued properly – with stiff penalties if they weren’t. If you paid more than $600 for services to any person, sole proprietor, partnership or LLC, in 2011, you should be issuing a Form 1099. A good rule of thumb is to always collect a Form W-9 from anyone requesting payment from you. If you hold payment until they return the W-9, then you have a better shot of getting all of the required information for your files in the event of an audit – and audits have been on the rise. Consult your tax advisor.

The IRS is also interested in finding out whether you are properly reporting people working for you – are they outside contractors or should they actually be employees? The IRS looks to a 20 part test to see if someone should be an employee or an independent contractor. Some things to think about are: 1) Does the worker receive instructions on where, when and how to perform the work? 2) Does the employer pay for workers expenses, or supply the tools and materials? 3) Are there set working hours? 4) Is there a contract? 5) Is there a right to quit? An employee can generally quit at any time without incurring a liability. An independent contractor is usually responsible for satisfactory completion of the job and is usually legally obligated to make good on their commitment. As you can see, there are lots of things to consider when determining the status of someone working for you. Please consult with your tax advisor.

IRS may be interested in your Quickbooks/Peachtree files
IRS agents are starting to request Quickbooks and Peachtree backup files from businesses under audit. The taxpayer must provide electronic records upon request. From these electronic records, the IRS can look at dates of transactions/entries, the person who performed the entries, and subsequent changes to the entries in an attempt to uncover errors or weaknesses. At this time, the software companies have not released an “audit copy” as an alternative to a full back up file. You might work with your accountant to ensure you have adequate books and records that would hold up under audit.

State Tax Credit Opportunity
Missouri and Kansas residents with incomes exceeding $200,000 should strongly consider purchasing state tax credits to cover their state income tax liabilities. Missouri tax credits, such as the Low Income Housing Tax Credit or the Historic Preservation Credit, can typically be purchased for 89-92 cents on the dollar. Area banks typically act as brokers. Kansas Angel Investor Tax Credits can typically be purchased for around 80 cents on the dollar, generally acquired from an out-of-state investor in a qualified high-tech Kansas company. Email Jim Zenk at Cornerstone CPA Group, PA with any questions: JimZ@cornerstonecpas.com.

About Cornerstone CPA Group, PA
Cornerstone is a public accounting firm in Overland Park, Kansas. For nearly three decades, Cornerstone has advised small businesses and individuals in the Kansas City area. Whether you need help with your individual tax situation, assistance getting your business off the ground, accounting department outsourcing, or sophisticated tax advice from a seasoned CPA, Cornerstone can help. www.cornerstonecpas.com

Please feel free to contact Jennifer Magyar at Jennifer@cornerstonecpas.com or Jim Zenk at jimz@cornerstonecpas.com.

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1102 GRAND Welcomes New KCNext President Ryan Weber

Posted by: Greg Elliott, Director of Business Development at 1102 GRAND

1102 GRAND welcomes Ryan Weber as the new president of KCNext! We are excited for Ryan to take the organization to the next level and look forward to assisting him in any way possible. Good luck, Ryan!

Read the announcement: KCnext – The Technology Council of Greater Kansas City Announces New President and Names New Board Leadership

KCnext – The Technology Council of Greater Kansas City has selected Ryan Weber as its president, effective January 24, 2012.

Representing 70 current KCnext member companies and growing, Weber will work to support tech/IT company members and grow the region’s tech ecosystem. He will support KCADC in its efforts to recruit new technology companies to the Greater Kansas City region. With his expertise in angel networks, Weber will collaborate with area tech companies to attract motivated funders to the area. Weber will also work closely with KCnext members to develop key educational programs and networking events, as well as encourage joint-calendaring and co-promotion with regional entrepreneurial organizations.

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1102 GRAND Named a “Company To Watch” by Processor Magazine

Posted by: Greg Elliott, Director of Business Development at 1102 GRAND

Thank you to Processor Magazine for featuring Kansas City data center 1102 GRAND as a “Company to Watch” in the Jan. 13 issue. Three reasons 1102 GRAND was chosen as a Company to Watch are:

Location of the colocation facility
Housing a large network of providers for customers
One-on-one attention to customers without a middle man

All of us at 1102 GRAND truly appreciate the publicity Processor Magazine has given our company.

Read the article: Colocation on a Grand Scale

If location is a defining factor in selecting a colocation provider, 1102 Grand (www.1102grand.com) has a leg up on the competition. Located in Kansas City’s Financial District, the company’s building is a hub for numerous cross-country fiber routes passing through 1102 Grand’s carrier neutral Meet Me Room—a fact that makes 1102 Grand able to provide customers strategic advantages other colocation providers in the region cannot.

“The building serves as a major hub for voice and data traffic in the region by providing a facility with the necessary infrastructure for carriers, service providers, and commercial customers to conduct network-related business together reliably and cost-effectively,” says Greg Elliott, director of business development at 1102 Grand. 1102 Grand is situated directly on Kansas City’s major metropolitan fiber ring, leading top-light telecommunications companies (Level 3, Verizon Business, and AT&T included) and regional carriers, service providers, and enterprise customers to build and operate data centers, nodes, and/or POPs (Points of Presence) at 1102 Grand.

“These tenants then extend their desired connectivity media (fiber, coax, copper, etc.) into our carrier-neutral Meet Me Room to interconnect with one another and provide services to other entities,” Elliott says.

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Kansas City Data Center 1102 GRAND Attains SSAE 16 Type II Audit

KANSAS CITY, MO–(Marketwire – Jan 10, 2012) - 1102 GRAND announced today that it has successfully completed the Statement on Standards for Attestation Engagements No. 16 (SSAE 16) Type 2 audit. SSAE 16 is a standard developed by the American Institute of Certified Public Accountants (AICPA) for service organizations and replaces the previous SAS 70 standard incorporating international controls based on the ISAE 3402 standard. Completion of the SSAE 16 Type 2 required an independent and rigorous examination by an independent Certified Public Accounting firm, Mayer Hoffman McCann P.C., validating that 1102 GRAND has the proper controls in place for the delivery of secure and high availability colocation and interconnection operations.

Greg Elliott, director of business development for 1102 GRAND, said, “The completion of an SSAE 16 Type 2 audit is yet another example of how 1102 GRAND continues to invest in our carrier hotel facility and signifies our ongoing commitment to delivering a high level of quality. For our colocation and interconnection customers, SSAE 16 compliance provides confidence our service organization adheres to the critical processes and operational controls necessary to support their business environments,” said Elliott.

1102 GRAND is a Midwestern carrier hotel and network neutral colocation facility specifically enhanced with the infrastructure to host and provide services to an array of global network operators including carriers, service providers and enterprise customers who demand highly secure and connected, customized solutions for their core networking equipment. 1102 GRAND offers a wide array of colocation options including cabinets and private cage space which are connected to a carrier neutral Meet Me Room, housing over 30 carriers and service providers (http://1102grand.com/) Twitter @1102grand and Facebook:http://www.facebook.com/pages/1102-GRAND/106559716056523

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Thank You Processor Magazine For Interviewing Greg Elliott, Business Development Director At 1102 GRAND, About How to Select The Right Colocation Provider

Thank you Processor Magazine for interviewing Greg Elliott, business development director at 1102 GRAND, about how to properly select the right collocation provider.

Here are some of the key takeaways:

1. Checking the redundancy level in place for HVAC, UPSes, PDus and other components

2. Requesting incident logs, maintenance records, etc.

3. Inquiring about what programs and contracts are in place for the data center infrastructure

To learn more about 1102 GRAND’s services, including colocation, call Greg at (816) 471-7872.

Read the article: Choose A Colocation Provider: Areas To Address When Narrowing The Field

Getting it right the first time is crucial when selecting a colocation provider, says Darin Stahl, Info-Tech Research Group lead analyst. For example, SMEs that move equipment into a provider’s space only to have to switch providers shortly after due to lack of foresight will pay a heavy price. “When you get into a colocation, switching costs are enormous,” he says. “This isn’t like buying a bunch of photocopiers, being unhappy with them, and putting them to the curb and getting new Xeroxes in. It’s a big deal to go through switching.” To find a good fit with a colocation provider, consider the following.

✔Acquire Enough Power & Space
Power and space are among the most important factors when judging providers. Where space is concerned, Clive Longbottom, service director of business process facilitation at Quocirca, says to ask yourself what you’re trying to accomplish, whether it’s to move existing or new workloads out of the data center or phase the data center out completely. If you expect to need additional physical space later, he says, get enough initially or negotiate with the provider to leave space around your area to avoid a forklift move from one part of the facility to another. This may cost more upfront, he says, but it will have less impact on the business later.

Greg Elliott, director of business development at 1102 Grand (www.1102grand.com), says checking the redundancy level in place for HVAC, UPSes, PDUs, and other components is also vital. “Not having enough redundancy for your organization’s particular requirements could be catastrophic if there was an outage,” he says; conversely, “paying for too much redundancy is likely to cause an organization to overpay for their colocation presence,” he says. Elliott advises requesting incident logs, maintenance records, etc., to determine how well the facility is run. “Based on meetings and facility tours I have been part of, people rarely inquire about what preventative maintenance programs and contracts are in place for the data center infrastructure,” he says.

As for power, Stahl says pricing is increasingly becoming variable. “It used to be I could go in and get a rack and I would know that for $340 a month or whatever the flat fee was, I had A-side, B-side power and this much commit,” he says. “Increasingly, though, vendors are enacting power-variation pricing clauses as frequently as quarterly to say, ‘Look, if I get a price increase from my supplier, I’m going to pass this on to you anywhere from 4 to 10%, and I’ll do that on a quarterly basis.’” In such cases, Stahl says obtaining fullmetered pricing can mean paying less.

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Kansas City Data Center 1102 GRAND Reviews: Updating Your Disaster Recovery Plan in 2012

Posted by: Greg Elliott, Director of Business Development at 1102 GRAND

This past year was one filled with man-made and natural disasters that had the potential to knock out communications and operations in entire cities. From tsunamis to fires to earthquakes, the unexpected could wipe out your whole operation in seconds. Even if your company has a comprehensive disaster recovery plan in place, you may want to check out what other industry leaders have covered in this article from DataCenterKnowledge.com.

Industry Perspectives 2011: Disaster Recovery

At 1102 GRAND, some of our customers use our Kansas City-based colocation facilities as a backup site in their business continuity plan, while others use 1102 GRAND as a production site or for use a hybrid approach. There are many possible approaches appropriate for various types of industries.

If you would like to schedule a tour and to discuss different options available for your business, just give me a call at 816-213-7731 or send me an email at Greg@1102GRAND.com.

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Todd Applegate of Kansas City’s 1102 GRAND Promoted to General Manager

Posted by: Greg Elliott, Director of Business Development at 1102 GRAND

Congratulations to Todd Applegate, who has been promoted to general manager of 1102 GRAND , the Midwest internet hub and colocation facility, as of December 1, 2011. Todd will be responsible for management of the 1102 Grand building and data center operations. Todd was promoted from director of operations and has worked with 1102 GRAND for 5 ½ years. Congratulations Todd, and thanks for all your hard work!

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1102 GRAND Congratulates UMKC On Their No. 1 Ranking For Innovation Research Management

Posted by: Greg Elliott, Director of Business Development at 1102 GRAND

Congratulations from 1102 GRAND to UMKC on their No. 1 ranking for Innovation Research Management by the Journal of Product Innovation Management! At 1102 GRAND, we have seen serious evidence of entrepreneurial energy in the Kansas City Area that can definitely be attributed, in part, to the UMKC’s Bloch School of Management and the faculty. Keep up the excellent work! Here is the full story from the UMKC website.

UMKC RANKED No. 1 IN THE WORLD

Kansas City, MO., December 5, 2011 – The University of Missouri-Kansas City (UMKC) today announced that it has been ranked as the world’s No. 1 university in innovation management research by the Journal of Product Innovation Management.

A total of 625 universities were ranked – including MIT, Harvard, Stanford, Michigan State and Texas A&M – on research topics and current trends in the field of innovation management. The ranking will be published in the March 2012 issue of the journal.

: UMKC Chancellor Leo Morton stresses the importance of this achievement.

“We are extremely proud to hold the No. 1 spot in the world for innovation management research,” said UMKC Chancellor Leo E. Morton. “UMKC aligns with the Kansas City community’s commitment to becoming the most entrepreneurial city in the nation through our focus on entrepreneurship across all campus disciplines.”

The results were driven by the research of three UMKC faculty – Michael Song, Ph.D., Mark Parry, Ph.D., and Lisa Zhao, Ph.D. – in the Henry W. Bloch School of Management’s (Bloch School) Department for Global Entrepreneurship and Innovation and the Institute for Entrepreneurship and Innovation. The three faculty also were listed among the top 50 innovation management scholars, with Michael Song ranking No. 1 in the world.

: The crowd celebrates after finding out the news.

Read the rest of this entry »

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Kansas City’s Think Big Partners Latest Initiative “The Gigabit Challenge Finale” Great Event to Turn Ideas into Viable Businesses

Posted by: Greg Elliott, Director of Business Development at 1102 GRAND

I wanted to take a moment to thank Think Big Partners for all they do to strengthen the Kansas City area business fabric on a daily basis. They host and sponsor numerous entrepreneurial events in the Kansas City region and around the nation. In addition, they provide a spot (BizPerc) and a system for people to grow their ideas into viable businesses through a number of different methods.

Their latest initiative, The Gigabit Challenge Finale, is going to include live pitches from the finalists vying for $100,000 in prize money as well as additional financing! See Allison Way’s recent blog post for further details and how to register. Thanks again and keep up the great work!

Experience Gigabit Speed: The Gigabit Challenge Finale Event

WRITTEN BY ALLISON WAY, SENIOR COPYWRITER & CHIEF EDITOR

With over 113 submissions, we knew we had to make The Gigabit Challenge Finale big. After all, we’re dealing with lightning-fast Internet speed, some of the most lucrative startup business plans and a panel of standout judges and advisory board members. So we’re opening the Gigabit Challenge Finale to the public this January at the Kansas City Public Library (Plaza Branch).

At the event, attendees will have the chance to watch live pitches from The Gigabit Challenge finalists, network with other entrepreneurs, investors and startup enthusiasts and sit in on the Awards Presentation. This all-day event will not only bring in The Gigabit Challenge finalists, but also many of TGC’s advisory board members and judging panel.

Join the team at Think Big Partners for The Gigabit Challenge Finale on January 18, 2012 from 8:00AM until 5:00PM (time subject to change) at the Kansas City Public Library Plaza Branch (4801 Main Street). The Gigabit Challenge Finale is FREE.

A huge thanks to the Kansas City Public Library for sponsoring The Gigabit Challenge Finale!

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Kansas City’s Centriq IT Training Event Great Opportunity For Business Employers

By Greg Elliott, Director of Business Development at 1102 GRAND

How often do you hear: I wish there was more IT talent available? I hear it on a weekly basis when I am visiting with clients and contacts from all sizes of companies, both in the Kansas City region and across the country.

I was talking with our friends at Centriq IT Training, and they mentioned they are having an IT Career Fair next Wednesday, December 7th, 2011 from 3:30 to 6:30 p.m.

This is a great opportunity to meet 50-75 IT candidates face-to-face…and it’s FREE for employers!

For more information and to register click here.

Good luck to both IT candidates and companies participating!

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1102 GRAND Updates and Announcements

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In Light of Data Center Tax News, Cornerstone 360 Shares Important Tax Information for Kansas City Businesses Filing in 2012

1102 GRAND Welcomes New KCNext President Ryan Weber

1102 GRAND Named a “Company To Watch” by Processor Magazine

Kansas City Data Center 1102 GRAND Attains SSAE 16 Type II Audit

Thank You Processor Magazine For Interviewing Greg Elliott, Business Development Director At 1102 GRAND, About How to Select The Right Colocation Provider

Kansas City Data Center 1102 GRAND Reviews: Updating Your Disaster Recovery Plan in 2012

Todd Applegate of Kansas City’s 1102 GRAND Promoted to General Manager

1102 GRAND Congratulates UMKC On Their No. 1 Ranking For Innovation Research Management

Kansas City’s Think Big Partners Latest Initiative “The Gigabit Challenge Finale” Great Event to Turn Ideas into Viable Businesses

Kansas City’s Centriq IT Training Event Great Opportunity For Business Employers