Step 1:
Start by cooking the sausage in a large skillet over medium heat. Break the sausage apart with a spatula as it cooks to crumble it into smaller pieces. Continue cooking until the sausage is fully browned and cooked through. This should take about 7-10 minutes. Drain any excess grease.

Step 2:
While the sausage is cooking, prepare the cream cheese. Place the softened cream cheese in a medium bowl and stir it until smooth and creamy. If the cream cheese is too hard, you can microwave it for about 15 seconds to soften it more.

Step 3:
Once the sausage is browned, return it to the skillet. Reduce the heat to low and add the softened cream cheese, stirring until it melts and combines with the sausage.

Step 4:
Next, add the can of diced tomatoes with green chilies to the skillet. Stir well to combine everything, ensuring the dip has a smooth, consistent texture.

Step 5:
Stir in the shredded cheddar cheese and sour cream, along with the garlic powder, onion powder, and salt and pepper to taste. Keep stirring until the cheese has melted completely and the dip is heated through.

Step 6:
(Optional) If you want a smoother consistency, you can transfer the dip to a slow cooker at this point. Set it to warm or low, and keep it there until you’re ready to serve. This also helps keep the dip hot during parties.