In a large bowl using an electric mixer, beat the softened butter and cream cheese on medium speed until smooth and creamy, about 2-3 minutes. Scrape down the sides of the bowl.

Add the granulated sugar and beat on medium-high speed until light and fluffy, about 2-3 minutes.

Add the egg, vanilla extract, and almond extract. Beat on medium speed until well combined.

In a separate medium bowl, whisk together the all-purpose flour, baking powder, and salt.

With the mixer on low speed, gradually add the dry ingredient mixture to the wet ingredients. Mix just until combined. Do not overmix. The dough will be very soft and sticky.

Cover the bowl with plastic wrap and refrigerate for at least 60 minutes, or up to 24 hours. Chilling is essential for this dough to be firm enough to handle.

When ready to bake, preheat your oven to 350°F (175°C). Line two large baking sheets with parchment paper.

In a small, shallow bowl, whisk together the powdered sugar, cornstarch, and Christmas sprinkles.

Use a 1-tablespoon cookie scoop to portion the chilled dough. Roll each portion into a smooth ball with your hands. Roll each ball generously in the powdered sugar and sprinkle mixture until it's completely coated.

Place the coated dough balls on the prepared baking sheets, about 2 inches apart.

Bake for 10-12 minutes. The cookies will look slightly underbaked and puffy, and the edges will be just set. The centers should remain very soft. They will flatten and develop their signature crackle as they cool.

Let the cookies cool on the baking sheet for 5 minutes before carefully transferring them to a wire rack to cool completely.