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Preheat the oven to 325 degrees F and line two baking sheets with parchment paper.
In a large bowl, stir the flour and powdered sugar together. Now add the softened butter and vanilla and mix with a hand mixer on low-medium speed until blended well. The dough will look crumbly and soft but should smush together when squeezed in your hands.
Place a sheet of parchment paper on your countertop and sprinkle with a little flour, then form the dough into a ball and place in the middle of the parchment paper.
Use another piece of parchment paper for the top, sprinkling a little flour on top of the dough to prevent sticking, and roll the dough to about ⅓-½ of an inch thick. Cut into desired shapes (I used a small rounded cookie cutter) and place on the prepared baking sheets.
Continue re-rolling the dough until it is all used. Bake in the oven for 12-15 minutes, until the bottom is just slightly golden. Let cool for 10 minutes before transferring to a cooling rack. Store in an airtight container for 5-6 days.