1. Sift flour with baking powder, soda, salt, and nutmeg; set aside.
2. In large bowl of electric mixer, at medium speed, beat butter, sugar, and egg until light and fluffy.
3. At low speed, beat in sour cream and vanilla until smooth.
4. Gradually add flour mixture, beating until well combined.
5. With rubber scraper, form dough into a ball. Wrap in waxed paper or foil; refrigerate several hours or over night.
6. Divide dough into 4 parts. Refrigerate until ready to roll out.
7. Meanwhile, preheat oven to 375 degrees. Lightly grease cookie sheets.
8. On well-floured surface, roll dough, one part at a time, 1/4 inch thick.
9. With floured star shaped cookie cutters, cut out cookies (minimum 3 to 4 of each size). Using spatula, carefully place cookies 2 inches apart on cookie sheet. If desired, re-roll trimmings and cut.
10. Bake 10 to 12 minutes, or until golden. Remove to wire rack; cool.