Prepare your workspace and ingredients. Preheat your oven to 350°F (175°C) and line baking sheets with parchment paper. Make sure your butter and cream cheese are properly softened – they should yield easily to gentle pressure but still hold their shape.
Cream the butter and cream cheese together. In a large bowl, beat the softened cream cheese and butter with an electric mixer on medium speed until completely smooth and fluffy, about 2-3 minutes. Scrape down the sides of the bowl halfway through to ensure even mixing.
Add the wet ingredients. Beat in the egg and vanilla extract (and almond extract if using) until fully incorporated and the mixture is smooth. The batter should look pale yellow and have a consistent texture.
Incorporate the cake mix. Gradually add the cake mix to the wet ingredients, mixing on low speed until just combined. Don’t overmix – stop as soon as there are no visible dry spots. The dough will be quite sticky and soft.
Color the dough (optional). Divide the dough into portions if you want multiple colors. Add a few drops of food coloring to each portion and gently fold until the color is evenly distributed. For Christmas, red and green are traditional, but you can also leave some dough plain for “snowball” cookies.
Chill the dough. Cover the bowl and refrigerate for at least 30 minutes until the dough is firm enough to handle. This prevents excessive spreading during baking and makes the dough easier to work with.
Shape the cookies. Place powdered sugar in a small bowl. Using a cookie scoop or spoon, portion the dough into 1-inch balls. Roll each ball in powdered sugar, coating generously on all sides.
Arrange and bake. Place the coated cookie balls on the prepared baking sheets, leaving about 2 inches between each cookie. Bake for 10-12 minutes until the edges are just set but the centers still appear slightly underdone (this ensures the “gooey” texture).
Cool before serving. Allow the cookies to cool on the baking sheet for 5 minutes, then transfer to a wire rack to cool completely. The cookies will firm up as they cool while maintaining their gooey centers.