Using either a stand mixer or hand mixer cream together cream cheese and butter until smooth. Add in sugar, egg, and extracts, and cream together for 3-4 minutes until light and fluffy.
Scrape down the sides of the bowl; add in salt and flour (make sure your flour is stir in until just barely combined.
Pull out a large piece of plastic wrap and spray it with cooking spray. Tip dough onto plastic wrap and tightly wrap. Refrigerate for 2 hours.
Once dough is chilled, preheat oven to 350 degrees.
Lightly flour your counter top or work surface and place unwrapped dough on top. Lightly flour the top of the dough and use a rolling pin to roll cookies out to be ⅜” thick. You can also place your dough between 2 sheets of wax paper or parchment paper and then roll the dough out if you are worried about your dough sticking to your rolling pin. You might be tempted to roll the dough out thinner so you can make more cookies, but trust me, ⅜” is the perfect width, you won’t want them thinner.
Lightly dust your cookie cutters with flour and begin cutting out your different shapes. Place cut out shapes onto a greased and lined baking sheet, leave about 1” between your cookies and bake for 8-10 minutes.
I like to stick any of my dough that has already been cut out, but is not baked yet into the freezer or fridge while it waits for its turn to go in the oven. This will make sure that your dough does not get too warm. Chilled dough is what helps these cookies to not spread and to hold their shape.
Leave cookies on baking sheet for 5 minutes before transferring to a cooling rack. Cool completely before frosting.
Frosting:
Using a hand mixer whip butter until light and fluffy, about 1 minutes. Alternate adding powdered sugar and milk, beating in between.
Add in extracts, salt, and food coloring (if desired), and beat until frosting is smooth and equally colored throughout the batch.
Make sure cookies are completely cool before frosting. I used a piping bag, but you can also use a knife to spread frosting on. Top with sprinkles (if desired).