Preheat the oven to 350°F (175°C).

In a large mixing bowl, combine the all-purpose flour, baking powder, baking soda, salt, and ground nutmeg. Whisk these dry ingredients together until evenly mixed.

In another bowl, cream together the softened unsalted butter, granulated sugar, and brown sugar until light and fluffy, about 3-5 minutes.

Beat in the egg, eggnog, and vanilla extract to the butter and sugar mixture.

Gradually incorporate the dry mixture into the wet mixture. Stir until the dough comes together.

Turn the dough onto a floured surface and roll it out to about 1/4 inch thick.

Use cookie cutters to cut shapes from the rolled-out dough.

Place cut-out cookies onto a greased or parchment-lined baking sheet, allowing space between each.

Bake in the preheated oven for 8-10 minutes, or until the edges turn lightly golden.

Remove from oven and let them cool on a wire rack.

Arrange cookies on a festive plate. Decorate with icing, sprinkles, or edible glitter if desired.

Serve these cookies with hot cocoa, coffee, or eggnog.