In a medium saucepan, add the sugar and ½ cup water (optional to whisk together). Heat over medium-high heat until it begins to boil.

Once the sugar is completely dissolved, reduce the heat slightly, to around medium or medium-low on a gas stove, and medium or still medium-high on electric. Continue to adjust the temperature as needed to keep the mixture at a low boil with bubbles continuously rising to the surface.

Continue to low boil for approximately 15-18 minutes until a light golden amber color appears. If around the 10-minute mark the boiling slows down, increase the heat. You do not need to stir it, but the pot can be swirled occasionally by gently lifting and turning it in a circular motion.

While the mixture is simmering, heat the remaining ½ cup water in the microwave or in a small saucepan. Using hot water for the next step will reduce splatters.

Once the light golden color appears just around the edges of the liquid, remove the saucepan from the heat. Note: do not allow the mixture to continue to boil once the color changes, or it can become too thick or burn quickly.

Wearing oven mitts, carefully whisk in the remaining ½ cup of water into the caramel syrup; it will splatter, so be careful. If any syrup hardens, continue whisking and return to heat until it's dissolved again. Stir in the vanilla extract.

Allow to cool before transferring to an airtight container. You can use it immediately if needed, but it will heat up iced beverages so mix it with milk or espresso first, before the ice. Store in the fridge for up to 2 weeks and use in your favorite beverages or recipes as desired.