In a small bowl, combine all dry ingredients (baking flour, baking powder, and salt) and reserve.
In the stand-up mixer bowl, cream together butter and sugar. Then add the egg and vanilla extract, mix until well combined then add flour mixture and mix until fully incorporated.
Shape dough into a ball, wrap in plastic wrap, and chill for at least 1 hour.
Meanwhile, preheat oven to 325°F. Line baking sheets with parchment paper and reserve.
Remove dough from refrigerator and discard plastic wrap. Place cold dough between two pieces of parchment paper and roll out to 1/8-inch thickness, removing and replacing parchment paper as needed. Cut out desired shapes using lightly floured cookie cutters and place on prepared baking sheets, about 1-inch apart.
Bake cookies until edges are slightly golden, 15 – 18 minutes, rotating sheets halfway through baking. Let cool completely (about 30 minutes) before decorating.
While cookies bake, prepare your favorite icing and colored sugar. For colored sugar, divide sugar into ¼ cup portions. Add 1 – 2 drops of food coloring per portion and mix thoroughly to distribute color.
To prepare icing, combine powdered sugar and milk in a bowl and whisk until smooth. Adjust consistency as needed with extra milk. If desired, divide icing into separate containers and color with food coloring.
Decorate your cookies with your kids! They’ll love to give out cookies they have decorated themselves! Happy Holidays!