Preheat oven to 350°F (175°C).
Line baking sheets with parchment paper.
Cream together softened cream cheese and butter.
Add granulated sugar and mix until fluffy.
Beat in egg and vanilla extract.
Combine flour, baking powder, and salt separately.
Gradually add dry ingredients to wet mixture.
Fold in diced fresh strawberries gently.
Drop rounded tablespoons onto prepared baking sheets.
Bake for 12-15 minutes until edges set.
Cool on wire racks completely.
Dust with powdered sugar before serving.