Step 1: Make the Cream Cheese Dough
In a stand mixer fitted with the paddle attachment (or using a hand mixer and large bowl), beat together the butter and cream cheese on medium speed until well combined and smooth, about 2-3 minutes. The mixture should be creamy and uniform with no visible lumps. In a separate bowl, whisk together the flour, sugar, and salt. With the mixer on low speed, gradually add the flour mixture to the butter mixture, mixing until just combined and the dough starts to come together. Don’t overmix – a few flour streaks are fine.

Step 2: Divide and Chill the Dough
Turn the dough out onto a lightly floured surface and gently knead 2-3 times until it forms a cohesive ball. Divide the dough into 4 equal portions (about 6 oz/170g each). Shape each portion into a flat disk about 1 inch thick, wrap tightly in plastic wrap, and refrigerate for at least 2 hours or up to 3 days. The dough must be thoroughly chilled before rolling, or it will be too sticky to work with.

Step 3: Prepare the Filling
While the dough chills, make your filling. In a medium bowl, stir together the finely chopped walnuts, sugar, and cinnamon until well combined. If you’re using chocolate chips, you can either mix them in now or sprinkle them on separately. Set aside. Place the jam in a small bowl and stir it to loosen it up, making it easier to spread.

Step 4: Roll Out the First Disk
When ready to assemble (the dough can be chilled overnight), preheat your oven to 350°F (175°C). Line two baking sheets with parchment paper. Remove one disk of dough from the refrigerator and let it sit at room temperature for about 5 minutes – it should be cold but pliable enough to roll. On a lightly floured surface, roll the disk into a 9-inch circle about 1/8 inch thick. Use a bench scraper or offset spatula to help lift the dough if it starts to stick, adding a light dusting of flour as needed.

Step 5: Add the Filling
Using an offset spatula or the back of a spoon, spread about 2 1/2 tablespoons of jam evenly over the entire circle of dough, leaving a tiny border around the edge. Sprinkle about 1/3 cup of the cinnamon-walnut mixture evenly over the jam, pressing down gently so it adheres. If using chocolate chips as a separate addition, sprinkle about 2 tablespoons over the nut mixture.

Step 6: Cut into Triangles
Using a pizza cutter or sharp knife, cut the circle into 12 equal wedges (like cutting a pizza). Start by cutting the circle in half, then cut each half into thirds, then cut each section in half again to create 12 triangular pieces. This may seem like a lot of cookies, but they’re meant to be petite pastries perfect for snacking.

Step 7: Shape the Rugelach
Starting from the wide outer edge, roll each triangle toward the point to create a crescent shape. Place each rugelach on the prepared baking sheet point-side-down, spaced about 1 inch apart (they don’t spread much). Curve the ends slightly inward to create that classic crescent shape. Don’t worry if some filling escapes – it happens to everyone!

Step 8: Repeat with Remaining Dough
Repeat the rolling, filling, cutting, and shaping process with the remaining three disks of dough. You should end up with 48 rugelach total.

Step 9: Apply Egg Wash and Sugar
In a small bowl, whisk together the egg and water until smooth. Using a pastry brush, gently brush the top of each rugelach with the egg wash, then sprinkle with coarse sugar for that beautiful sparkle and crunch.

Step 10: Bake to Golden Perfection
Bake for 22-25 minutes, rotating the pans halfway through, until the rugelach are golden brown and the bottoms are crisp. Some of the filling will bubble out during baking – this is normal and creates delicious caramelized edges. Let the cookies cool on the baking sheets for 5 minutes, then carefully transfer to a wire rack using a thin spatula. The jam will be molten hot at first but will set as the cookies cool.