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Beat the cream cheese and butter together: Using an electric mixer, beat the cream cheese and butter together until completely smooth, about 3 minutes on medium speed. Use a rubber spatula to scrape down the sides of the mixing bowl to ensure that the mixture is mixed evenly. Beat in vanilla extract and powdered sugar: Beat in the vanilla extract. With the mixer running on low speed to start, slowly add in 2 cups of the powdered sugar. Powdered sugar has cornstarch in it that will thicken the frosting as well as making it sweet. Add more powdered sugar 1 tablespoon at a time to the frosting until you get your desired level of sweetness and thickness. Spread or pipe the frosting to decorate: Use a blunt knife or spatula to spread the frosting, or spoon the frosting into a piping bag to decorate your cupcake or cake.