Preheat oven to 350°F (175°C). Beat butter and sugar on medium speed until fluffy and pale, about 2 minutes.

Add egg, vanilla, and almond extract (if using); beat until smooth, about 30 seconds.

Whisk flour, baking powder, and salt. Gradually mix into the wet ingredients on low until just combined. Do not overmix.

Roll dough on a floured surface to ¼-inch thickness. Cut with princess-shaped cutters and place on parchment-lined baking sheets 1 inch apart.

Bake 8 to 10 minutes until edges are set. Cool on the baking sheet for 3 minutes, then transfer to a wire rack to cool completely.

For the icing, whisk powdered sugar and meringue powder. Add 4 tablespoons water and vanilla; beat until stiff peaks form. Add more water a little at a time for piping consistency. Tint with gel food coloring.

Pipe icing onto cooled cookies and decorate with sprinkles if desired. Let icing set at room temperature for about 2 hours.