Preheat the oven to 350° F. Grease and flour two 9-inch round cake pans. Set aside.
In a large mixing bowl, beat the cake mix, sour cream, water, oil, food coloring, eggs, and vanilla with an electric mixer on medium speed for 3 minutes. Divide the batter between the prepared pans.
Bake for 28 to 30 minutes or until cakes test done when a wooden pick inserted in the center of each comes out clean. Cool cakes in pans for 10 minutes on wire racks. Remove from pans and cool completely on wire racks before frosting.
Fill and frost sides and tops of cake with Cream Cheese Frosting.
In a large mixing bowl, beat all ingredients together with an electric mixer on medium speed until mixture is smooth, adding more powdered sugar (or a little milk) to obtain a spreading consistency, if needed.Makes 6 cakes and 3 cups frosting