Add the butter and sugar to a large bowl and stir well to combine (you can do this by hand with a wooden spoon or use a hand-held electric mixer). Stir or beat in the egg and vanilla. Add the flour, baking powder, baking soda, and salt, and stir or beat to combine.
Transfer the dough to a piece of plastic wrap. Flatten the dough to a disk, wrap it well, and refrigerate until fully chilled, about 1 hour.
Preheat the oven to 350F. Roll out the dough on a well-floured surface to a thickness of about 1/4-inch. Use cookie stamps to stamp the dough into as many cookies as you can. Arrange the cookies about 1-inch apart on ungreased, unlined cookie trays.
Gather up the dough scraps, form them into a ball, roll it out, stamp it into cookies, and arrange them on cookie trays. Repeat this process until all the dough is gone. (I get about 2 half-sheet pans of cookies from this recipe.)
Bake the cookies until set, about 10 to 12 minutes, rotating the trays once halfway through (don’t bake them until they’re golden or they’ll be overcooked).
Cool 5 minutes on the trays, and then use a metal spatula to transfer to a wire rack to cool to room temperature, about 15 minutes.
For the Frosting:
Add the butter, vanilla, and salt to a large bowl. Use a hand-held electric beater to mix until smooth. Beat in the powdered sugar (it will be lumpy). Add the milk and continue beating until smooth and creamy.
To Decorate:
Frost the cookies and add any sprinkles or decorations you like before the frosting sets.
Notes
Flour Amount: 2 cups of flour for this recipe will yield soft cutout cookies that spread a bit while baking (this was always my mom’s preference for these cookies). If you increase the flour to 2 1/4 cups you will have cookies that hold their shape well and don’t expand much while baking (I like these cookies a bit better). Either way, make sure you refrigerate the dough until fully chilled!
Dough Stickiness: This dough will be sticky whether you use 2 cups or 2 1/4 cups of flour. That’s why it’s important to chill it, and roll it out on a well-floured surface.
Storage: Once the frosting hardens, you can store these cookies wrapped well (or in an airtight container) at room temperature for up to 1 week. If you have to stack them, you can do it between layers of wax paper or parchment paper to keep them neater.
Make Ahead: You can bake these cookies up to 1 week before you frost and decorate them! Store them wrapped well (or in an airtight container) at room temperature.
Recipe Yield: I get about 28 medium-sized cookies out of this recipe (not the small stars and not the massive gingerbread men; think along the lines of Christmas trees, snowflakes, and snowmen). It’s usually enough cookies to fill 2 half-sheet pans, which are 18 by 13-inches. Of course depending on the size of your cookie stamps you will get more or less cookies out of this recipe. If you’re making them for a big crowd, use a small cookie stamp (such as a star) to get a lot more cookies!
Nutrition Information: The nutritional information for this recipe was calculated without the festive sprinkles.
Freezing Instructions
You can either freeze this cookie dough it's baked, or freeze the cookies once after they're baked and cooled.To freeze cutout sugar cookie dough, make the recipe through Instruction 2 in the section "For the Cutout Cookies" of the recipe card. Wrap the dough disks in plastic wrap as directed, and then in freezer paper. Put the wrapped dough disks into freezer-safe zip-top bags. Freeze for up to 3 months. Thaw the night before you want to bake the cookies, and then continue with the rest of the recipe as written.To freeze cut out cookies after they're baked, once the cookies are cool, arrange them in an airtight container between pieces of parchment paper. Freeze for up to 2 months.