tsconfig.json

{
  "compilerOptions": {
    // Includes type definitions for the DOM, iterable DOM elements, and ECMAScript features.
    "lib": ["dom", "dom.iterable", "esnext"],

    // Allows JavaScript files to be imported into your TypeScript project.
    "allowJs": true,

    // Skips type checking of all declaration files (*.d.ts).
    "skipLibCheck": true,

    // Enables all strict type-checking options.
    "strict": true,

    // Instructs the compiler not to emit any compiled output (like JavaScript files).
    "noEmit": true,

    // Enables compatibility with Babel-style ES module interop.
    "esModuleInterop": true,

    // Sets the module system for the project to ESNext.
    "module": "esnext",

    // Specifies how module imports are resolved. "bundler" is typically used with bundlers like webpack.
    "moduleResolution": "bundler",

    // Allows importing JSON modules.
    "resolveJsonModule": true,

    // Ensures each file can be safely transpiled without relying on other files.
    "isolatedModules": true,

    // Preserves JSX to be transformed into JavaScript by another step (like Babel).
    "jsx": "preserve",

    // Enables incremental compilation by saving information about the project graph from the last compilation.
    "incremental": true,

    // Includes TypeScript plugins, in this case, a plugin for Next.js.
    "plugins": [
      {
        "name": "next"
      }
    ],

    // Sets up a custom path alias. "@" can be used to import modules from the "src" directory.
    "paths": {
      "@/*": ["./src/*"]
    }
  },

  // Specifies which files are to be included in the compilation.
  "include": ["next-env.d.ts", "**/*.ts", "**/*.tsx", ".next/types/**/*.ts"],

  // Excludes the node_modules folder from the compilation.
  "exclude": ["node_modules"]
}