Step 1: In a large bowl, using an electric mixer, cream together the softened butter and cream cheese until light and fluffy, about 2-3 minutes.
Step 2: Add the granulated sugar and vanilla extract to the creamed mixture. Beat until well combined and fluffy, 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 bowl with plastic wrap and chill the dough in the refrigerator for at least 30 minutes (or up to an hour) to firm it up, which helps prevent spreading.
Step 6: Preheat your oven to 350°F (175°C). Line baking sheets with parchment paper or silicone baking mats.
Step 7: Scoop rounded tablespoons of dough and roll them into balls. Place them about 2 inches apart on the prepared baking sheets. Bake for 12-15 minutes, or until the edges are lightly golden and the centers are just set. Do not overbake to keep them soft.
Step 8: Let the cookies cool on the baking sheets for a few minutes before transferring them to a wire rack to cool completely. Once cool, dust generously with powdered sugar if desired.