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Sift flour with baking powder, soda, salt and nutmeg. Set aside.
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In large bowl of electric mixer, at medium speed, beat butter, sugar, and egg until light and fluffy
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At low speed, beat in sour cream and vanilla until smooth.
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Gradually add flour mixture, beating until well combined.
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With rubber spatula, form dough into ball, wrap in plastic wrap; refrigerate several hours or overnight.
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Divide dough into four parts. Refrigerate until ready to roll out.
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Meanwhile preheat oven to 375ᵒF. Lightly grease cookie sheets.
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On well floured surface, roll out dough, one part at a time, 1/4-inch thick.
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With floured 2 1/2-inch round or scalloped cookie cutter, cut out cookies. Using spatula, place, 2 inches apart on cookie sheets.
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Sprinkle tops of cookies with sugar. Place a raisin or almond in the center of each, if desired. Reroll trimmings and cut.
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Bake 10 to 12 minutes, or until golden. Remove to wire rack; cool.
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