Preheat oven to 350°F (175°C). Beat 1/2 cup butter and 4 oz cream cheese on medium speed for 2 minutes. Add 1 cup granulated sugar and beat for 2 more minutes until pale and fluffy.

Add the 1 large egg, 1 tsp vanilla extract, and 1/4 tsp almond extract. Beat on medium for 1 minute until smooth and glossy.

Whisk together 2 3/4 cups flour, 1/2 tsp baking powder, and 1/4 tsp salt in a separate bowl. Add to the butter mixture in 2 additions, mixing on low just until no dry streaks remain.

Scoop dough into 2-tbsp balls onto parchment-lined baking sheets, spaced 2 inches apart. Flatten each to about 1/2 inch thick. Bake for 10 to 12 minutes until edges are set. Cool on the pan for 5 minutes, then transfer to a wire rack for 20 minutes.

Beat 2 tbsp butter for 1 minute. Add 2 cups sifted powdered sugar, 3 tbsp whole milk, and 1/2 tsp vanilla extract. Beat on medium-high for 2 minutes until smooth and spreadable. Frost cooled cookies, add sprinkles, and transfer to a serving plate.