Cream Cheese Sugar Cookies Are Soft, Sweet, and Melt-in-Your-Mouth

1. In a large bowl beat butter and cream cheese with a mixer on medium 30 seconds. Add sugar, baking powder, baking soda, salt, and nutmeg (if using). Beat until combined, scraping bowl as needed. Beat in egg. Beat in flour. Divide dough in half. Wrap and chill until easy to handle, 1 hour.

2. Preheat oven to 375°F. Line cookie sheets with parchment paper. On a lightly floured surface roll one portion of dough at a time to 1/4-inch thickness. Use floured 2 1/2-inch cookie cutters to cut out shapes, rerolling scraps as needed. Place cutouts 1 inch apart on prepared cookie sheets

3. Bake until bottoms are light brown, 5 to 6 minutes. Cool on cookie sheets 2 minutes. Transfer to a wire rack; cool completely. If you like, decorate with Cream Cheese Frosting and sprinkles.

How to Make Cream Cheese Frosting

In a large bowl beat 8 oz. softened cream cheese, 1/2 cup softened butter, and 2 tsp. vanilla with a mixer on medium until light and fluffy. Gradually beat in 5 1/2 to 6 cups powdered sugar to reach spreading consistency. If you like, tint with gel or paste food coloring. Store frosting and frosted cookies in an airtight container in the refrigerator up to 3 days. Makes 3 1/2 cups.