In a large bowl if using a handheld mixer or in your mixing bowl, if you’re using a stand mixer, beat together butter and cream cheese until lightened in color and fluffy.

Add powdered sugar in three additions, starting the mixing on the lowest speed and increasing speed until well incorporated. Scrape down sides before each addition. Before the last addition, add the vanilla, beat in well, then the remainder of the powdered sugar.

Frost or ice with the cream cheese frosting immediately. It will stiffen as it sits. If decorating with nuts, sprinkles, etc., decorate before the frosting sets up.