Preheat oven to 350 degrees and fill a cupcake pan with cupcake liners.
In a large bowl, cream together the butter and sugar and cream until completely mixed.
Add in the eggs, one at a time, beating to combine.
Add in the vanilla.
In another large bowl, combine all of the dry ingredients.
In a third bowl, combine the milk and water.
Slowly pour the wet ingredients into the dry, stirring well after each addition to make sure all ingredients are thoroughly combined.
Evenly divide the batter into the 12 cupcake cups, making sure they are no more than 2/3 of the way full.
Bake for 21 minutes or until a toothpick inserted in the middle comes out dry.
Let cupcakes cool on wire racks before frosting.