Blend sugar, eggs, and butter together in a large bowl.

In a separate medium-size bowl, whisk together flour, baking powder, baking soda, salt, and nutmeg.

Measure milk in a measuring cup and add vanilla.

Alternately mix the flour mixture and milk mixture into egg mixture until well blended.

Cover the bowl with plastic wrap and refrigerate for about an hour.

When ready to fry heat the oil in a pot or fryer to 375 degrees.

Take donut mixture out of the refrigerator and 1/2 of the dough onto a floured counter surface.

Knead about 12 times then roll out onto counter being sure counter and roller have plenty of flour on them or dough will stick and not lift off of surface easily after being cut.

Roll dough into a rectangle shape about 1/4" thick. Cut dough with a pizza cutter about 2"x 3", then cut 2 slits with a butter knife into them.

Drop 3 or 4 donuts (depending on how large your pot or fryer is) into hot oil using a long-handled slotted spoon.

 After about 1 minute and 20 seconds turn donuts over and cook for another minute and 20 seconds.

Remove donuts to drain on paper towels. Sprinkle with powdered sugar and enjoy!