In a bowl, blend butter and cream cheese thoroughly. Add sugar, and beat until fluffy. Add egg extracts; blend well.
Mix together flour and baking powder. Add to cream cheese mixture; mix in until well blended. Divide dough in half and wrap tightly. Refrigerate for 1 hour.
Roll dough out. Cut out into desired shapes and bake on a greased cookie sheet for 8 to 10 minutes at 375 degrees F. Cool on wire racks.