Mix powdered sugar, butter, vanilla, almond extract and egg in large mixing bowl. Sift flour and baking powder over the wet ingredients and mix just until combined. Cover and refrigerate the dough at least 1 hour.

Preheat oven to 375 degrees and line a cookie sheet with parchment paper. Remove dough from the fridge and roll out on a lightly-floured surface, using only as much flour as needed to prevent sticking. Roll the dough to ¼" thick and cut as many cookies as possible from the dough, dipping the cookie cutter into flour between each cut.

Transfer the cutout cookies to prepared cookie sheets, spaced at least 1" apart. Collect the scraps of dough and re-roll until all the dough has been cut into shapes.

Bake cookies 7–8 minutes then let cool. While the cookies are cooling, stir together the ingredients for the icing.

In a large bowl or the bowl of an electric mixer fitted with paddle attachment, add powdered sugar and meringue powder. Begin mixing on low speed then add water. Beat icing on low speed 7–8 minutes or until it begins to hold peaks then add to piping bag. This will be used to outline the cookies. It’s important that it be a thick consistency to hold its shape when piped onto the cookie. Cover icing that’s not being used with damp towel at all times.

Outline cookie with icing. Allow the outline icing to dry.

After cookies have all been outlined, add a few drops of water to remaining icing to create your flood icing. This will have a slightly thinner consistency flowing easily when moved with tip of icing bag and the surface should quickly smooth itself out and not hold marks. Fill all outlined areas with the flood icing and allow them to dry completely.

Use any remaining icing to affix any further decorations desired.