Preheat your oven to 350°F (175°C). Line a baking sheet with parchment paper.
In a medium bowl, whisk together the flour, baking powder, and salt. Set aside.
In a large mixing bowl, cream the softened butter and granulated sugar together until light and fluffy, about 2-3 minutes.
Add the egg, vanilla extract, and optional almond extract to the butter mixture. Mix until well combined.
Gradually add the dry ingredients to the wet ingredients, mixing until just combined. Do not overmix.
Roll the dough into a ball, wrap it in plastic wrap, and refrigerate for at least 30 minutes to firm up (optional).
Once chilled, sprinkle flour on a clean surface and roll out the dough to about ¼ inch thick. Use cookie cutters to cut out shapes.
Place the cookie shapes onto the prepared baking sheet, leaving space between them. Bake in the preheated oven for 8-10 minutes, or until the edges are lightly golden.
Remove from the oven and let the cookies cool on the baking sheet for 5 minutes before transferring them to a cooling rack.
While the cookies cool, prepare the icing by mixing the powdered sugar and milk in a small bowl until smooth. Adjust consistency with more milk or powdered sugar as needed. Add food coloring if desired.
Once the cookies are completely cooled, decorate with icing and sprinkles as desired.