Preheat oven to 375.
Beat room-temperature butter, sugar and vanilla in a large bowl until creamy. Add egg and beat until light and fluffy. Stir in the milk until incorporated.
Sift together the dry ingredients and blend into the mixture in batches.
Divide the dough in half and wrap in cling wrap. Refrigerate 1 hour.
On a lightly floured surface, roll out one half of the dough to 1/4-1/8 inch. Cut with cookie cutters and transfer to a cookie sheet lined with parchment paper. Decorate with egg wash painting and sprinkles. Repeat with the other half of the dough.
Bake 6-8 minutes or until cookies are done in the middle. Cool several minutes before transferring to a cooling rack.