Line baking sheet with parchment paper. Cream together butter and cream cheese with electric mixer.
Add sugar and beat for 1 minute. Add egg and beat to combine. Add extracts and beat until combined. Add in baking powder and cake flour (in three sections), mixing to combine.
Once incorporated, refrigerate dough for at least an hour.
Preheat oven to 375 degrees F. Dough is sticky so use flour on your hands to roll out 1-2 inch balls. You can use the bottom of a cup/glass dipped in flour to gently flatten the balls. Don't flatten too much or the cookies won't puff up.
Bake for 9-11 minutes. Important: Pull them out when you see the underside edges turning golden! This might vary for your oven and altitude. Watch these cookies carefully.
If you want, you can cut back on the almond extract, leave it out, or swap it for vanilla or even a lemon extract! These cream cheese cookies are delicious frosted or not!