Combine butter, powdered sugar, and flour in a large bowl using an electric mixer (I use my stand mixer with a paddle attachment). Note: The dough may appear crumbly, but keep mixing and it will turn into a soft dough. Trust me! You can also form the dough with your hands. Roll dough out on a lightly floured surface using a rolling pin. The dough should be 1/4″- 1/2″ thick.
Cut out using a small star cookie cutter and place on an ungreased cookie sheet lined with parchment paper.
Bake at 325 degrees for 14 minutes*. Let cool on a baking sheet 5 minutes before transferring to a wire rack. Cool completely.*The edges and bottoms of the cookies should be a light golden brown. I cook these cookies a little longer than normal so that they are nice and set up. Perfect for dipping. While cookies cool go ahead and get your melted red, white, and blue chocolate ready.
Heat 8 oz. of each color of melting chocolate with 1 teaspoon of coconut oil in microwave-safe bowls. Heat for 30 seconds, stir. Repeat heating in 15-second intervals until melted and smooth (this takes about 1 minute total).Note: I find that it's easiest to dip one color at a time. This way you don't have to worry about the other colors cooling and hardening while you are dipping the other cookies. Dip cookies into the melted chocolate. Flip over with a fork and cover the cookie completely. Lift the cookie out of the melted chocolate with a fork, tapping the fork against the side of the bowl to allow excess chocolate to drip off.
Place dipped cookies back on a cookie sheet with parchment paper. Sprinkle with patriotic sprinkles or let the cookies set up and drizzle candy melts across them later.
Repeat with the other colors until all cookies have been dipped and covered.
You'll have a bit of leftover melted chocolate in all colors. Reheat them in the microwave, if necessary, so that they are melted and smooth again. Pour into disposable frosting bags (or ziploc baggies), make a small cut in the corner, and drizzle over cookies. You can also drizzle the melted colors over the cookies with a spoon, working in quick motions so that only a small amount of color is drizzled over each cookie.
Allow cookies to set up. Break off any of the drizzle that spilled over the edges and hardened onto the parchment paper. This will leave the cookies with crisp edges.