Using the whisk attachment on your stand mixer, beat together the cream cheese and butter on medium speed until light and fluffy. (You could also use a hand mixer.)
Turn down the speed of the mixer and slowly add in the powdered sugar and vanilla extract. Scrape down the sides of the bowl as needed.
Once all the ingredients are incorporated, turn up the speed to medium-high and beat for 2 minutes until frosting is light and fluffy.
Cover and refrigerate until ready to use. (see note)
Notes
If you're making this frosting well ahead of time, you may need to let it warm up slightly by letting it sit out on the counter until soft enough to pipe/spread onto your dessert.