Line baking sheets with silicone mats or parchment paper; set aside.
In a large bowl, using a stand or hand mixer, cream together the butter, cream cheese, granulated sugar, powdered sugar, egg, and almond extract until light and fluffy.
Sprinkle the flour, baking powder, and salt over the mixture, and mix on low speed until a soft dough forms. (The dough is meant to be soft, because you’ll be working in some extra flour later as you roll out the cookies.) Chill the dough for about 30 minutes.
Preheat oven to 375 degrees F. On a well-floured work surface, roll out the chilled dough to about 3/8” thickness. (Thinner dough=less soft cookies.) Cut out rounds with a cookie cutter or drinking glass and transfer to prepared baking sheets. Don’t hesitate to sprinkle more flour as you go to make the cookies easy to roll out and transfer.
Bake for 10-12 minutes, just until the edges are the tiniest bit brown. Let cool briefly on baking sheets, then transfer to wire racks to cool completely.
To make the frosting, use a stand or hand mixer to combine all ingredients, beginning on low speed and then whipping in high speed until smooth and light. To make it slightly thicker, add more powdered sugar; to make it thinner, add a tiny bit more milk. Frost cookies, add sprinkles, and enjoy!