In a large mixing bowl, stir together 3 ounces softened cream cheese, 1 tablespoon softened butter and 3 cups powdered sugar. Once the mixture comes together in a ball, add the peppermint extract and mix to incorporate the flavor into the dough.

Sprinkle powdered sugar on work surface. Place dough on surface and knead dough. Roll dough into ropes, then cut into small pieces. Roll each piece into a ball. Roll each ball in powdered sugar.

Place dough balls on waxed paper. Flatten each ball with a fork, then stand 2 hours or until dry.