Place flour, baking powder and salt in a medium bowl and whisk to combine.

Place sugar and butter in a large bowl and beat with an electric mixer until creamy and smooth. Add extracts, egg and cream cheese, beating to incorporate.

Gradually add flour mixture and stir to combine. Divide dough in half and wrap tightly in plastic wrap. Refrigerate for at least 1 hour.

Preheat oven to 350 degrees F. Line cookie sheet with parchment paper and set aside.

Roll dough out to 1/4 inch thick on a powdered sugar-dusted work surface. Cut cookies into shapes. Sprinkle with decorating sugar if desired.

Place an inch apart on prepared baking sheets. Bake until edges are golden brown, about 12 minutes.

Remove from heat and let cool on baking sheet for 1-2 minutes before transferring to a wire rack. After cooling, cookies can be decorated with icing.

For 3D cookies assembly, attach pieces with icing which acts as a tasty edible glue.