tsconfig.json

{
  "compilerOptions": {
    // Enable latest features
    "lib": ["ESNext", "DOM"],
    "target": "ESNext",
    "module": "ESNext",
    "moduleDetection": "force",
    "allowJs": true,
    "jsx": "react-jsx",

    //setting up preact
    "jsxImportSource": "preact",
    "baseUrl": "./",
    "paths": {
      "react": ["node_modules/preact/compat"],
      "react-dom": ["./node_modules/preact/compat/"]
    },
    "typeRoots": ["src/types", "./node_modules/@types"],

    // Bundler mode
    "moduleResolution": "bundler",
    "allowImportingTsExtensions": true,
    "verbatimModuleSyntax": true,
    "noEmit": true,

    // Best practices
    "strict": true,
    "skipLibCheck": true,
    "noFallthroughCasesInSwitch": true,

    // Some stricter flags (disabled by default)
    "noUnusedLocals": false,
    "noUnusedParameters": false,
    "noPropertyAccessFromIndexSignature": false
  },
  "resolve": {
    "extensions": [".js", ".jsx", ".ts", ".tsx", ".json", ".svg", ".css"]
  },
  "include": ["src"]
}