In a large mixing bowl, beat the softened butter and granulated sugar together until light and creamy. Add the egg, vanilla extract, and almond extract if using. Mix until everything is well combined.

In a separate bowl, whisk together the flour, baking powder, and salt. Gradually add the dry ingredients to the butter mixture. Mix on low speed until a soft dough forms. Avoid overmixing.

Divide the dough into two portions and flatten each into a disc. Wrap in plastic wrap and refrigerate for about 30 minutes. Chilling helps the dough become easier to roll and keeps the cookies from spreading too much during baking.

Preheat your oven to 350°F (175°C). Line baking sheets with parchment paper.

Lightly flour your work surface and rolling pin. Roll out one portion of dough to about ¼-inch thickness. Use Christmas cookie cutters to cut out your desired shapes. Transfer the cookies to the prepared baking sheets, leaving a little space between each one.

Bake for 10 to 12 minutes, or until the edges are just beginning to turn lightly golden. The centers should remain relatively pale. Allow the cookies to rest on the baking sheet for about 5 minutes before transferring them to a cooling rack.

In a small bowl, combine the powdered sugar, milk, and vanilla extract. Stir until smooth. Add a little more milk if the icing is too thick or powdered sugar if it is too thin.

Divide the icing into separate bowls. Add red food coloring to one, green to another, and leave the remaining icing white.

Once the cookies have cooled completely, spread or pipe the icing over them. Add Christmas sprinkles while the icing is still wet. Decorate with festive patterns, stripes, dots, or simple outlines.

Place the decorated cookies on a cooling rack and allow the icing to dry completely before serving or storing.