Beat the butter and sugar on medium speed until light and fluffy, about 3 to 4 minutes.

Mix in the egg, vanilla, and almond extract (if using). In a separate bowl, whisk the flour, baking powder, and salt. Slowly add the dry ingredients to the butter mixture, mixing until just combined.

Shape the dough into a disc, wrap, and refrigerate for at least 30 minutes. Preheat the oven to 350°F (175°C). On a floured surface, roll the dough to ¼-inch thickness and cut shapes, re-rolling scraps once.

Place cookies 1 inch apart on parchment-lined sheets and bake 10 to 12 minutes, until edges are pale golden. Cool on the sheet 5 minutes, then transfer to a rack to cool completely.

For the icing, whisk powdered sugar, meringue powder, 3 tbsp water, and vanilla until smooth, adding more water if needed. Decorate the cooled cookies with the icing and sprinkles, then let the icing set until hard.