Divide dough in half; form into two 1/2-inch-thick disks. Wrap in plastic; chill until firm, at least 1 hour.
Preheat oven to 350 degrees. On a piece of floured waxed paper, roll one disk to a thickness of 3/16 inch; chill. Repeat with remaining dough.
Flouring cutters as you go (to prevent sticking), cut dough into desired shapes; carefully transfer to baking sheets. Re-chill rolled-out dough if difficult to work with.
If decorating, brush with egg wash, then sprinkle with sugar or sprinkles. Bake until edges are firm (not brown), 15 to 20 minutes for 3-inch cookies. Cool 1 to 2 minutes on baking sheets; cool completely on a wire rack.
Store finished cookies in an airtight container, up to 2 weeks.