Step 1: Make the Cookie Dough

1. In a medium bowl, whisk together the flour, baking powder, and salt.
2. In a separate large bowl, beat the softened butter and sugar until light and fluffy (about 2-3 minutes).
3. Add the egg, vanilla extract, and almond extract (if using), and mix until well incorporated.
4. Gradually add the dry ingredients to the wet mixture, mixing until a smooth dough forms.

Step 2: Chill the Dough
Shape the dough into a disc, wrap it in plastic wrap, and refrigerate for at least 1 hour. Chilling makes it easier to roll and helps the cookies hold their shape during baking.

Step 3: Roll and Cut the Cookies

1. Preheat the oven to 350°F (175°C) and line baking sheets with parchment paper.
2. Roll out the chilled dough to about ¼-inch thickness on a floured surface.
3. Use gnome-shaped cookie cutters (or round cutters and carve shapes manually) to create your cookies.
4. Place the cookies on the prepared baking sheets about 1 inch apart.

Step 4: Bake
Bake the cookies for 8-10 minutes or until the edges are lightly golden. Allow them to cool on the baking sheets for 5 minutes before transferring them to a wire rack to cool completely.

Step 5: Prepare the Royal Icing

1. In a mixing bowl, combine powdered sugar, meringue powder, and water. Beat until stiff peaks form (about 5 minutes).
2. Divide the icing into bowls and tint them with gel food coloring. Use red for hats, gray for gnome bodies, white for beards, and green for accents.

Step 6: Decorate the Cookies

1. Use piping bags fitted with small round tips to outline and flood the cookies with colored icing.
2. Attach mini marshmallows to the tops of the hats and edible pearls or candies for noses.
3. Sprinkle shredded coconut or use sprinkles to create fluffy beards. Let the icing set completely before serving or storing.