In a large bowl, cream butter and sugar until light and fluffy, 5-7 minutes. Beat in the eggs, milk and extract. Combine dry ingredients; gradually add to creamed mixture and mix well. Cover and chill for 2 hours.
Preheat oven to 350°. Roll out dough on a lightly floured surface to ⅛-in. thickness. Cut with a 2-in. cookie cutter dipped in flour. Place cutouts 2 in. apart on ungreased baking sheets. Sprinkle with colored sugar if desired.
Bake until the edges just begin to brown, 8-9 minutes. Remove to wire racks to cool.
