Mix together 3/4 cup of cream cheese and 3/4 cup butter on a medium-high speed until fully combined.
Add in 1/2 cup granulated sugar and 1 tsp vanilla extract. Mix on a medium-high speed for 1-2 minutes until the mixture becomes lighter in color.
Slowly mix in 1 2/3 cup all-purpose flour on a low speed, scraping the sides of the bowl as need. The cookie dough should be thick and a bit sticky.
Wrap the cookie dough in plastic wrap and chill for 2 hours or overnight in the fridge.
Preheat your oven to 350 F / 175 C and take your cookie dough out of the fridge.
Cut the block of cookie dough into 16 equal sized pieces.
Toss each block of cookie dough in a small bowl filled with 1/2 cup of granulated sugar until lightly coated, then use the flat bottom of a glass to flatten each cookie to be about 1/3 inch thick. If your glass is sticking to your cookies as you flatten them, dunk the bottom of the glass in the bowl of granulated sugar.
If desired, sprinkle a tsp of sprinkles on top of each flattened cookie and gently press them into the cookie using the bottom of the same glass.
Bake for 14-16 minutes, or until the edges just start to brown. Keep an eye on these cookies, they brown quickly, and you don't want to over-bake them.
Let the cookies cool on the pan for 10 minutes, then move them to a wire rack to finish cooling. Store in an airtight container for up to 3 days at room temperature or for up to a week in the fridge.