Step 1: In a large bowl, cream together the softened butter, softened cream cheese, and granulated sugar with an electric mixer until light and fluffy (about 2-3 minutes).
Step 2: Beat in the vanilla extract and egg yolk until well combined, scraping down the sides of the bowl as needed.
Step 3: In a separate medium bowl, whisk together the all-purpose flour, baking powder, and salt.
Step 4: Gradually add the dry ingredients to the wet ingredients, mixing on low speed until just combined. Be careful not to overmix the dough.
Step 5: Cover the dough and refrigerate for at least 30 minutes, or up to 2 hours. This helps to firm up the dough and prevents excessive spreading.
Step 6: Preheat your oven to 375°F (190°C). Line baking sheets with parchment paper.
Step 7: If desired, place the powdered sugar in a shallow bowl. Scoop rounded tablespoons of dough and roll into balls. Roll each dough ball in powdered sugar to coat, if using.
Step 8: Place the cookie dough balls about 2 inches apart on the prepared baking sheets.
Step 9: Bake for 10-12 minutes, or until the edges are lightly golden and the centers are just set. Do not overbake to keep them soft.
Step 10: Let the cookies cool on the baking sheets for 5 minutes before transferring them to a wire rack to cool completely. Enjoy!