Preheat oven to 350 degrees. In a large bowl, beat the butter until creamy. Add the sugar and beat until light and fluffy. Add egg and vanilla. Gradually add flour and baking powder until just combined.

Divide dough into 4 equal sections and separate into 4 bowls. Sprinkle 2 Tablespoons of Jell-O onto each section and knead to thoroughly combine. (*If you have children, they love to help at this step!)

Roll dough into 1 inch balls, and then roll the dough balls into their corresponding Jell-O flavor to coat. Place onto baking sheet about 2 inches apart, and flatten slightly with the bottom of a bowl. If desired, sprinkle with coordinating sanding sugar to decorate.

Bake at 350 degrees for 8-10 minutes. Cool on baking sheets 3-5 minutes and move to a wire rack to cool completely. Store in an air-tight container.