In a large bowl, with electric mixer, beat cream cheese and butter until fluffy, about 1 minute. Add powdered sugar, milk, and vanilla; beat until light and fluffy, 2 minutes.
If frosting seems too thick, beat in additional milk, ½ teaspoon at a time. If frosting is too thin, add powdered sugar, ¼ cup at a time.
Frost completely cooled cake. Frosted cake should be refrigerated.
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Notes
Makes 3 cups, enough to frost a 2 layer cake. If desired, cut recipe in half to frost a 9 x 13 inch cake.
Make Ahead: make the frosting up to a day ahead and refrigerate. Take the frosting out of the fridge an hour before you want to use it so it comes to room temperature. It will soften slightly and be easier to spread. Stir well before using.
Storage: Store leftover cream cheese frosting in the refrigerator for up to three days. Store cakes frosted with cream cheese frosting in the fridge, too.
To Freeze Frosting: Freeze extra cream cheese frosting in zip top freezer bags, removing any extra air as you seal the bag. Label the freezer bag and use the frosting within a month. Defrost the frosting overnight in the freezer. Snip a corner from the bag and pipe the frosting right from the bag onto cupcakes or cake. If the frosting separates slightly, remove it from the bag and stir or beat the frosting until it's creamy.