Cream the butter and sugar together until light and fluffy, about 5 minutes.
With the mixer on low , add the eggs, 1 at a time, scraping down the bowl after each addition. Add the vanilla extract and mix well.
In another bowl, sift together the flour, baking powder, baking soda, and salt.
Add the dry ingredients and the milk to the batter in 3 parts - start with dry, add milk, then end with dry.
Mix until just combined. Fold in 7 ounces of coconut.
Line a muffin pan with paper liners. Fill each liner about half full.
Bake for 25 to 35 minutes, until the tops are brown and a toothpick comes out clean.
Allow to cool in the pan for 15 minutes then remove to a baking rack and cool completely.
FROSTING
Cream together the cream cheese, butter, and vanilla extract
Add the powdered sugar and mix until smooth.
Frost the cupcakes and sprinkle with the remaining coconut.
Notes
Changing up the flavor of the cupcake: If you like a more pronounced coconut flavor, using coconut extract in place of some of the vanilla is a good way to achieve that!
How to toast coconut
You know it's done when you can smell it!How to toast coconut on the stove (much like when you toast nuts), set a skillet over medium heat and add the coconut. Do NOT ADD any oil or butter. Cook until the coconut begins turning light/gold brown, stirring constantly (about 5 minutes)How totoast coconut in the oven - add the coconut to a baking sheet. Bake at 325 degrees F until light/gold brown (about 6-8 minutes)