Step 1: Prepare the Dough

1. In a large mixing bowl, beat the softened butter and cream cheese with an electric mixer on medium speed until smooth and creamy.
2. Add the granulated sugar and vanilla extract, and continue beating until the mixture is light and fluffy.
3. In a separate bowl, whisk together the flour and salt.
4. Gradually add the dry ingredients to the butter and cream cheese mixture, mixing on low speed until just combined. Be careful not to overmix, as this can make the dough tough.

Step 2: Chill the Dough

1. Divide the dough in half and shape each portion into a flat disc. Wrap each disc in plastic wrap and refrigerate for at least 1 hour, or until the dough is firm and easy to handle.
2. Chilling the dough is essential for maintaining the shape of the pinwheels and ensuring that the cookies bake evenly.

Step 3: Prepare the Jam Filling

1. If your jam is too runny, mix in 1 tablespoon of powdered sugar to thicken it slightly. This helps prevent the jam from oozing out during baking.
2. Set the prepared jam aside.

Step 4: Roll Out the Dough

1. Once the dough is thoroughly chilled, remove one disc from the refrigerator and place it on a lightly floured surface.
2. Roll the dough into a rectangle about 1/8 inch thick. Try to keep the edges as straight as possible, as this will help create uniform pinwheels.
3. Spread a thin layer of jam over the dough, leaving a small border around the edges to prevent the jam from spilling out when rolled.

Step 5: Roll and Chill the Dough

1. Starting from one long edge, carefully roll the dough into a tight log, using gentle pressure to keep the roll even.
2. Wrap the log in plastic wrap and refrigerate for 30 minutes to 1 hour, or until it’s firm enough to slice. This chilling step helps the pinwheels keep their shape during baking.
3. Repeat the rolling, spreading, and chilling process with the second disc of dough.

Step 6: Slice and Bake

1. Preheat your oven to 350°F (175°C) and line a baking sheet with parchment paper.
2. Once the dough is firm, remove one log from the refrigerator and slice it into 1/4-inch rounds using a sharp knife.
3. Place the sliced cookies on the prepared baking sheet, spacing them about 1 inch apart.
4. Bake in the preheated oven for 12-15 minutes, or until the edges are lightly golden.
5. Remove from the oven and allow the cookies to cool on the baking sheet for 5 minutes before transferring them to a wire rack to cool completely.

Step 7: Dust with Powdered Sugar (Optional)

1. For an extra festive touch, dust the cooled cookies with powdered sugar just before serving.

Step 8: Serve and Store

1. Serve your Cream Cheese Jam Pinwheel Cookies on a festive plate, or package them in a holiday tin for gift-giving.
2. Store the cookies in an airtight container at room temperature for up to 5 days. These cookies can also be frozen for up to 1 month; simply thaw at room temperature before serving.