Whisk flour, baking powder, baking soda, and salt. Set aside.
Mix butter, sugar, and egg until fluffy. Add sour cream and vanilla, and mix. Mix in half the flour mixture, then the rest. Form dough into a ball, cover in wax paper, and refrigerate for at least an hour.
Remove from refrigerator and place on a floured surface. Cut into 4 parts and one piece at a time, roll into a ball then roll flat to 1/4” thick. Cut out cookies until all the dough is used.
Place on parchment-lined baking sheets and bake at 375° for 9-12 minutes, or until lightly golden. Let cool fully.
Mix powdered sugar and milk to make icing - add a touch more milk if too thick. If you’re using colors, spoon some into separate bowls and mix in food coloring to achieve desired shades. Spread icing on cookies. If you’re going to decorate with colored sugar, add as you like while icing is wet. Let dry and enjoy!