In a large bowl, beat the cream cheese until smooth using a hand or stand mixer.
Add the vanilla and ¼ cup of icing sugar. Beat on low until incorporated. Add an additional ¼ cup of sugar and beat on low until combined. Repeat, adding ¼ cup of sugar each time until incorporated.
Increase the mixer speed to high and beat for about 1 minute until smooth and lightly fluffy.
Use immediately if spreading on cakes or cupcakes or set in the refrigerator for 30 minutes to firm up if piping.
Notes
LeftoversStore leftover cream cheese frosting (and anything frosted with it) in the refrigerator for up to 4 days or freeze for up to 3 months.