Preheat oven to 350F (175C) and line two cookie sheets with parchment paper

Combine butter and cream cheese and use an electric mixer (or stand mixer) to stir until creamy and well-combined.

Add sugar and stir again until thoroughly combined.

Stir in egg and vanilla extract.

In a separate bowl, whisk together flour, cornstarch, baking powder, and salt.

Gradually add dry ingredients to wet until completely combined.

Transfer dough to a clean surface that’s been generously dusted with flour. Working with just half of the dough at a time, transfer dough to surface and use your hands to form into a ball (add additional flour to the surface if it’s sticky).

Use a rolling pin to roll dough to just under ½” thick. Use cookie cutters to cut into shapes and transfer to prepared baking sheets.

Bake in 350F (175C) oven for 8-10 minutes* Allow to cool completely on baking sheet before covering with frosting.

Cream Cheese Frosting

Once your cookies have cooled, prepare your frosting by combining butter, cream cheese, and vanilla extract. Use an electric mixer (or a stand mixer) to cream ingredients together until well-combined.

Gradually (with mixer on low-speed) add powdered sugar until completely combined. Stir in cornstarch (make sure it's well incorporated into the frosting).

Spread or pipe frosting over completely cooled cookies.

Sprinkles for decorating optional