Preheat Oven: Preheat your oven to 350°F (175°C). Line a baking sheet with parchment paper.

Cream Butter and Cream Cheese: In a large mixing bowl, beat together the softened butter and cream cheese until smooth and creamy.

Add Sugar and Egg: Add the granulated sugar and mix until light and fluffy. Beat in the egg and vanilla extract until well combined.

Combine Dry Ingredients: In a separate bowl, whisk together the flour, baking powder, and salt. Gradually add the dry ingredients to the wet mixture, mixing until just combined. Do not overmix.

Form the Cookies: Scoop or roll the dough into 1-inch balls and place them on the prepared baking sheet about 2 inches apart. Gently flatten each ball with your fingers or the bottom of a glass.

Bake: Bake in the preheated oven for 10-12 minutes, or until the edges are lightly golden. Be careful not to overbake; the cookies should be soft.

Cool and Dust: Let the cookies cool on the baking sheet for a few minutes, then transfer to a wire rack to cool completely. Dust with powdered sugar if desired.