In a large mixing bowl, use an electric mixer to beat together the softened butter, vanilla extract, egg, and cream cheese until light and fluffy, about 2-3 minutes.

Gradually incorporate the box of yellow cake mix into the butter mixture, mixing on low speed until well combined.

Cover the bowl tightly with plastic wrap and refrigerate for 30 minutes to 1 hour.

Preheat your oven to 350°F (175°C). Roll the chilled dough into 1-inch balls, coating each ball generously in holiday sprinkles and then rolling in powdered sugar.

Line baking sheets with parchment paper and place the balls 2 inches apart. Bake for 10-12 minutes.

Allow the cookies to cool on the baking sheets for about 5 minutes before transferring to a wire rack.