Best-Ever Sugar Cookies

Step 1: Cream the butter, cream cheese and sugar until light and fluffy.

Step 2: Beat in egg yolk and extracts.

Step 3: Combine the flour, salt, baking soda and nutmeg and gradually add to creamed mixture.

Step 4: Cover and refrigerate for 3 hours.

Step 5: On a lightly floured surface, roll out dough to 1/8-in. thickness.

Step 6: Cut with floured 2-1/2-in. cookie cutters.

Step 7: Place 1 in. apart on ungreased baking sheets.

Step 8: Bake at 375° for 8-10 minutes or until edges begin to brown.

Step 9: Allow to cool for 2 minutes before removing from pans to wire racks to cool completely.

Step 10: For icing, in a small bowl, combine the confectioners' sugar, water and meringue powder; beat on low speed just until combined. Beat on high for 4 minutes or until soft peaks form. Cover icing with damp paper towels or plastic wrap between uses.

Step 11: Working quickly, spread or pipe icing over cookies; let dry at room temperature for several hours or until firm.

Step 12: Use small new paintbrushes or toothpicks and food coloring to make designs on the cookies. Let stand until set.