Preheat your oven to 350°F (175°C). Line a baking sheet with parchment paper.
In a mixing bowl, cream together the softened butter and granulated sugar until light and fluffy. This should take about 3-5 minutes.
Beat in the egg and vanilla extract until well combined.
In a separate bowl, whisk together the all-purpose flour, baking powder, and salt. Gradually add the dry ingredients to the butter mixture, mixing until a dough forms.
Divide the dough into two portions. If using food coloring, add a few drops to one portion and mix until the desired color is achieved.
On a lightly floured surface, roll out the dough to about ¼ inch thickness. Use cookie cutters to cut out desired shapes.
Place the cut-out cookies on the prepared baking sheet, leaving space between them as they will spread slightly.
Bake in the preheated oven for 8-10 minutes, or until the edges are lightly golden. Allow the cookies to cool on the baking sheet for a few minutes before transferring them to a wire rack to cool completely.
Once cooled, decorate the cookies with icing as desired.