Sift or whisk powdered sugar to remove lumps.
Add 3 tablespoons of the water and the extract, whisking until combined. Add more water until you reach the correct consistency.
To test consistency, run your whisk or a knife through the bowl of frosting- your frosting should slowly move back together until you can’t see any trace of the whisk any longer. This process should take about 10 seconds. If the frosting is too thick, it will not pool back together, and if it is too thin, it will pool back together too quickly. The ten second test doesn’t lie. Add more water for a thinner icing and more powdered sugar if your icing becomes too thin.
Cover tightly in a tupperware or with a wet paper towel if you are not using it immediately, as frosting will dry out and become clumpy.
Whisk occasionally and add more milk if it becomes too thick.