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

In a mixing bowl, combine the softened butter and cream cheese. Use an electric mixer to blend until creamy and well-combined.

Add the sugar and mix until fully combined.

Stir in the egg and vanilla extract.

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

Gradually add the dry ingredients to the wet mixture until everything is well combined.

Transfer the dough to a floured surface. Form it into a ball and roll out the dough to just under ½ inch thick.

Use cookie cutters to cut the dough into shapes and place them on the prepared baking sheets.

Bake the cookies for 8-10 minutes. Once baked, allow them to cool completely.

In a bowl, mix together the softened butter, cream cheese, and vanilla extract until smooth.

Gradually add the powdered sugar until fully blended, then stir in the cornstarch.

Frost the cooled cookies and decorate with optional sprinkles.