Yield: makes about 2 1/2 dozen 3-inch cookies
Preheat oven to 350 degrees F. Line baking sheets with parchment paper or nonstick silicone baking mats. Set aside.
In a large bowl, whisk together flour, baking powder, and salt. Set aside.
In the bowl of a stand mixer fitted with a paddle attachment, cream butter. Once smooth, add sugar and extracts. Mix on low speed until combined. Add egg and continue to mix. Scrape down bowl as needed to ensure thorough mixing.
Add flour in two additions. Continue mixing on low speed until dough forms. Divide dough into two equal parts. Work with one piece of a dough at a time. Roll dough to a thickness of about 1/4-inch on a lightly floured work surface. Stamp out desired cookie shapes. Gather scraps and re-roll dough as necessary.
Place cookie cutouts on a prepared baking sheets. Bake for 6-8 minutes until the edges of the cookies are set. Allow cookies to cool in pan for 3-5 minutes until cookies have firmed up enough to move. Transfer cookies to wire rack to cool to room temperature.
In the bowl of a stand mixer, whisk together warm water and meringue powder. Let mixture sit undisturbed for 3 minutes.
Using a paddle attachment, mix on low speed. Add powdered sugar in three additions. Add vanilla extract. Mix on low speed until icing holds a ribbonlike trail on the surface of the mixture when you raise the paddle.
Divide icing into smaller bowl. Color icing as desired using gel food coloring, powdered food coloring, or liquid food coloring.
Save any remaining royal icing by covering surface of icing with a damp paper towel.
If using piping tips, place tips inside piping bags (pastry bags). Partially fill bags with desired royal icing colors.
Start by piping a general outline of shape. Pipe any additional designs as desired. Immediately top with sprinkles. Allow icing to set before stacking cookies.
Iced cookies can be stored at room temperature for up to 3 days.