Preheat your oven to 350°F and line a baking sheet with parchment paper. While the oven heats, sift the powdered sugar into a bowl to remove any lumps—this ensures a smooth dough without grittiness. Measure out all your ingredients and place them in separate bowls or on a clean workspace so everything is ready to go. Pour the 2 tablespoons of granulated sugar for coating into a shallow plate and set aside.

In a medium bowl, whisk together the flour, baking soda, baking powder, and salt until evenly combined. This distributes the leavening agents throughout the flour so your cookies will rise evenly and have a consistent crumb. Set this bowl aside—you'll use it in just a moment.

In a large bowl, beat the softened butter and granulated sugar together for 2 minutes until light and fluffy—this creates air pockets that give the cookies their tender texture. Add the sifted powdered sugar and continue beating for another 30 seconds until fully incorporated. I like to scrape down the bowl midway through mixing to ensure everything combines evenly.

Add the room-temperature egg to the creamed butter mixture and beat for 30 seconds until incorporated. Pour in the vanilla extract and beat for another 30 seconds. The room-temperature egg combines more smoothly and won't cause the butter mixture to seize or separate.

Add the dry ingredient mixture from Step 2 to the wet mixture from Step 4 and mix on low speed until just combined—stop as soon as you don't see any white flour streaks. Overmixing develops gluten, which makes cookies tough. Fold in the sprinkles by hand using a spatula, being gentle to distribute them evenly without crushing them.

Scoop the dough into 2-tablespoon-sized balls and roll them between your hands until smooth. Working with 3-4 balls at a time, gently roll each ball in the sugar on the plate from Step 1 to coat all sides, then place it on the prepared baking sheet about 2 inches apart. The sugar coating creates a sparkly, slightly crispy exterior that contrasts beautifully with the soft interior.

Bake for 9-10 minutes, until the edges are just set but the centers still look slightly underdone—they'll continue cooking on the hot pan. Remove from the oven and let the cookies rest on the baking sheet for 5 minutes to set up, then transfer them to a wire rack to cool completely. This resting period on the sheet is crucial because it prevents the warm cookies from breaking apart.