diff --git a/packages/db-mongodb/src/init.ts b/packages/db-mongodb/src/init.ts
index 86a1fc519d..4b4f4a92bd 100644
--- a/packages/db-mongodb/src/init.ts
+++ b/packages/db-mongodb/src/init.ts
@@ -79,7 +79,6 @@ export const init: Init = async function init(this: MongooseAdapter) {
 
     // TS expect error only needed until we launch 2.0.0
     // eslint-disable-next-line @typescript-eslint/ban-ts-comment
-    // @ts-expect-error
     this.payload.collections[collection.slug] = {
       config: collection,
     }
diff --git a/packages/db-mongodb/src/queries/sanitizeQueryValue.ts b/packages/db-mongodb/src/queries/sanitizeQueryValue.ts
index 243e19bc60..1210c4b922 100644
--- a/packages/db-mongodb/src/queries/sanitizeQueryValue.ts
+++ b/packages/db-mongodb/src/queries/sanitizeQueryValue.ts
@@ -1,4 +1,4 @@
-import type { Field, TabAsField } from 'payload/dist/fields/config/types'
+import type { Field, TabAsField } from 'payload/types'
 
 import mongoose from 'mongoose'
 
diff --git a/packages/db-mongodb/src/transactions/beginTransaction.ts b/packages/db-mongodb/src/transactions/beginTransaction.ts
index 2941389a8a..9af96ea96d 100644
--- a/packages/db-mongodb/src/transactions/beginTransaction.ts
+++ b/packages/db-mongodb/src/transactions/beginTransaction.ts
@@ -1,3 +1,4 @@
+// @ts-expect-error // TODO: Fix this import
 import type { TransactionOptions } from 'mongodb'
 import type { BeginTransaction } from 'payload/database'
 
diff --git a/packages/db-mongodb/tsconfig.json b/packages/db-mongodb/tsconfig.json
index 6d1756c1e2..3120f08405 100644
--- a/packages/db-mongodb/tsconfig.json
+++ b/packages/db-mongodb/tsconfig.json
@@ -1,16 +1,11 @@
 {
+  "extends": "../../tsconfig.json",
   "compilerOptions": {
-    "composite": true,
-    "declaration": true /* Generates corresponding '.d.ts' file. */,
-    "esModuleInterop": true /* Emit additional JavaScript to ease support for importing CommonJS modules. This enables 'allowSyntheticDefaultImports' for type compatibility. */,
-    "forceConsistentCasingInFileNames": true /* Ensure that casing is correct in imports. */,
-    "module": "Node16",
-    "moduleResolution": "Node16" /* Required for exports to work */,
+    "composite": true, // Make sure typescript knows that this module depends on their references
+    "noEmit": false /* Do not emit outputs. */,
+    "emitDeclarationOnly": true,
     "outDir": "./dist" /* Specify an output folder for all emitted files. */,
-    "resolveJsonModule": true,
-    "rootDir": "./src" /* Specify the root folder within your source files. */,
-    "skipLibCheck": true /* Skip type checking all .d.ts files. */,
-    "target": "ESNext"
+    "rootDir": "./src" /* Specify the root folder within your source files. */
   },
   "exclude": [
     "dist",
@@ -19,9 +14,11 @@
     "test",
     "node_modules",
     ".eslintrc.js",
-    "**/*.spec.js",
-    "**/*.spec.jsx",
-    "**/*.spec.ts",
-    "**/*.spec.tsx"
-  ]
+    "src/**/*.spec.js",
+    "src/**/*.spec.jsx",
+    "src/**/*.spec.ts",
+    "src/**/*.spec.tsx"
+  ],
+  "include": ["src/**/*.ts", "src/**/*.tsx", "src/**/*.d.ts", "src/**/*.json"],
+  "references": [{ "path": "../payload" }] // db-mongodb depends on payload
 }
diff --git a/packages/db-postgres/tsconfig.json b/packages/db-postgres/tsconfig.json
index 6d1756c1e2..8aa2b21021 100644
--- a/packages/db-postgres/tsconfig.json
+++ b/packages/db-postgres/tsconfig.json
@@ -1,16 +1,11 @@
 {
+  "extends": "../../tsconfig.json",
   "compilerOptions": {
-    "composite": true,
-    "declaration": true /* Generates corresponding '.d.ts' file. */,
-    "esModuleInterop": true /* Emit additional JavaScript to ease support for importing CommonJS modules. This enables 'allowSyntheticDefaultImports' for type compatibility. */,
-    "forceConsistentCasingInFileNames": true /* Ensure that casing is correct in imports. */,
-    "module": "Node16",
-    "moduleResolution": "Node16" /* Required for exports to work */,
+    "composite": true, // Make sure typescript knows that this module depends on their references
+    "noEmit": false /* Do not emit outputs. */,
+    "emitDeclarationOnly": true,
     "outDir": "./dist" /* Specify an output folder for all emitted files. */,
-    "resolveJsonModule": true,
-    "rootDir": "./src" /* Specify the root folder within your source files. */,
-    "skipLibCheck": true /* Skip type checking all .d.ts files. */,
-    "target": "ESNext"
+    "rootDir": "./src" /* Specify the root folder within your source files. */
   },
   "exclude": [
     "dist",
@@ -19,9 +14,11 @@
     "test",
     "node_modules",
     ".eslintrc.js",
-    "**/*.spec.js",
-    "**/*.spec.jsx",
-    "**/*.spec.ts",
-    "**/*.spec.tsx"
-  ]
+    "src/**/*.spec.js",
+    "src/**/*.spec.jsx",
+    "src/**/*.spec.ts",
+    "src/**/*.spec.tsx"
+  ],
+  "include": ["src/**/*.ts", "src/**/*.tsx", "src/**/*.d.ts", "src/**/*.json"],
+  "references": [{ "path": "../payload" }] // db-postgres depends on payload
 }
diff --git a/packages/payload/package.json b/packages/payload/package.json
index 396f35ccaa..d9e6fbb9b4 100644
--- a/packages/payload/package.json
+++ b/packages/payload/package.json
@@ -282,7 +282,7 @@
     "build": "pnpm copyfiles && pnpm build:swc && pnpm build:types && pnpm build:components",
     "build:components": "webpack --config dist/bundlers/webpack/components.config.js",
     "build:swc": "swc ./src -d ./dist --config-file .swcrc",
-    "build:types": "tsc --emitDeclarationOnly --outDir dist -p tsconfig.build.json",
+    "build:types": "tsc --emitDeclarationOnly --outDir dist",
     "build:watch": "nodemon --watch 'src/**' --ext 'ts,tsx' --exec \"pnpm build:tsc\"",
     "clean": "rimraf dist",
     "clean:cache": "rimraf node_modules/.cache",
diff --git a/packages/payload/tsconfig.build.json b/packages/payload/tsconfig.build.json
deleted file mode 100644
index 5e019be986..0000000000
--- a/packages/payload/tsconfig.build.json
+++ /dev/null
@@ -1,50 +0,0 @@
-{
-  "compilerOptions": {
-    "allowJs": true /* Allow javascript files to be compiled. */,
-    "checkJs": false /* Report errors in .js files. */,
-    "composite": true,
-    "declaration": true /* Generates corresponding '.d.ts' file. */,
-    "esModuleInterop": true /* Enables emit interoperability between CommonJS and ES Modules via creation of namespace objects for all imports. Implies 'allowSyntheticDefaultImports'. */,
-    "forceConsistentCasingInFileNames": true /* Disallow inconsistently-cased references to the same file. */,
-    "jsx": "react" /* Specify JSX code generation: 'preserve', 'react-native', or 'react'. */,
-    "module": "Node16",
-    "moduleResolution": "Node16" /* Specify module resolution strategy: 'node' (Node.js) or 'classic' (TypeScript pre-1.6). */,
-    /* Do not emit comments to output. */
-    "noEmit": false /* Do not emit outputs. */,
-    /* Concatenate and emit output to single file. */
-    "outDir": "./dist" /* Redirect output structure to the directory. */,
-    "paths": {
-      "payload/auth": ["./src/auth/types.ts"],
-      "payload/config": ["./src/config/types.ts"],
-      "payload/generated-types": ["./src/generated-types.ts"],
-      "payload/types": ["./src/types/index.ts"]
-    },
-    "resolveJsonModule": true,
-    "rootDir": "./src" /* Specify the root directory of input files. Use to control the output directory structure with --outDir. */,
-    "skipLibCheck": true /* Skip type checking of declaration files. */,
-    "sourceMap": true,
-    "strict": false /* Enable all strict type-checking options. */,
-    "target": "ESNext",
-    "types": ["node"]
-  },
-  "exclude": [
-    "dist",
-    "build",
-    "tests",
-    "test",
-    "node_modules",
-    ".eslintrc.js",
-    "**/*.spec.js",
-    "**/*.spec.jsx",
-    "**/*.spec.ts",
-    "**/*.spec.tsx",
-    "temp"
-  ],
-  "extends": "../../tsconfig.json",
-  "include": ["src/**/*.ts", "src/**/*.tsx", "src/**/*.d.ts", "src/**/*.json"],
-  "ts-node": {
-    "esm": true,
-    "experimentalSpecifierResolution": "node",
-    "swc": true
-  }
-}
diff --git a/packages/payload/tsconfig.json b/packages/payload/tsconfig.json
index 96a6fcc996..44b325b0a9 100644
--- a/packages/payload/tsconfig.json
+++ b/packages/payload/tsconfig.json
@@ -1,18 +1,10 @@
 {
+  "extends": "../../tsconfig.json",
   "compilerOptions": {
-    "allowJs": true /* Allow javascript files to be compiled. */,
-    "checkJs": false /* Report errors in .js files. */,
-    "composite": true,
-    "declaration": true /* Generates corresponding '.d.ts' file. */,
-    "esModuleInterop": true /* Enables emit interoperability between CommonJS and ES Modules via creation of namespace objects for all imports. Implies 'allowSyntheticDefaultImports'. */,
-    "forceConsistentCasingInFileNames": true /* Disallow inconsistently-cased references to the same file. */,
-    "jsx": "react" /* Specify JSX code generation: 'preserve', 'react-native', or 'react'. */,
-    "lib": ["dom", "dom.iterable", "esnext"],
-    "module": "Node16",
-    "moduleResolution": "Node16" /* Specify module resolution strategy: 'node' (Node.js) or 'classic' (TypeScript pre-1.6). */,
-    /* Do not emit comments to output. */
-    "noEmit": true /* Do not emit outputs. */,
-    /* Concatenate and emit output to single file. */
+    "composite": true, // Required for packages/db-mongodb to build
+    "noEmit": false /* Do not emit outputs. */,
+    "emitDeclarationOnly": true,
+    "rootDir": "./src" /* Specify the root directory of input files. Use to control the output directory structure with --outDir. */,
     "outDir": "./dist" /* Redirect output structure to the directory. */,
     "paths": {
       "payload/auth": ["./src/auth/types.ts"],
@@ -20,28 +12,25 @@
       "payload/generated-types": ["./src/generated-types.ts"],
       "payload/types": ["./src/types/index.ts"]
     },
-    "resolveJsonModule": true,
-    "rootDir": "./src" /* Specify the root directory of input files. Use to control the output directory structure with --outDir. */,
-    "skipLibCheck": true /* Skip type checking of declaration files. */,
-    "sourceMap": true,
-    "strict": false /* Enable all strict type-checking options. */,
-    "target": "ESNext",
-    "types": ["jest", "node", "@types/jest"]
+    "types": ["jest", "node", "@types/jest"],
+    "lib": ["dom", "dom.iterable", "esnext"]
   },
-  "exclude": ["dist", "build", "temp", "node_modules"],
-  /* Like tsconfig.build.json, but includes test directory and doesnt emit anything */
-  "include": [
-    "src/**/*.ts",
-    "src/**/*.tsx",
-    "src/**/*.d.ts",
-    "src/**/*.json",
-    "test/**/*.ts",
-    "test/**/*.tsx",
-    "test/**/*.d.ts"
+  "exclude": [
+    "dist",
+    "build",
+    "tests",
+    "test",
+    "node_modules",
+    ".eslintrc.js",
+    "src/**/*.spec.js",
+    "src/**/*.spec.jsx",
+    "src/**/*.spec.ts",
+    "src/**/*.spec.tsx",
+    "temp"
   ],
+  /* Like tsconfig.build.json, but includes test directory and doesnt emit anything */
+  "include": ["src/**/*.ts", "src/**/*.tsx", "src/**/*.d.ts", "src/**/*.json"],
   "ts-node": {
-    "esm": true,
-    "experimentalSpecifierResolution": "node",
     "swc": true
   }
 }
diff --git a/test/.eslintrc.cjs b/test/.eslintrc.cjs
index 9f064a7343..865656a50e 100644
--- a/test/.eslintrc.cjs
+++ b/test/.eslintrc.cjs
@@ -61,7 +61,7 @@ module.exports = {
     },
   ],
   parserOptions: {
-    project: ['../tsconfig.json'],
+    project: ['./tsconfig.json'],
     tsconfigRootDir: __dirname,
   },
   root: true,
diff --git a/test/tsconfig.json b/test/tsconfig.json
new file mode 100644
index 0000000000..2618a58833
--- /dev/null
+++ b/test/tsconfig.json
@@ -0,0 +1,19 @@
+{
+  "extends": "../tsconfig.json",
+  "compilerOptions": {
+    "noEmit": false /* Do not emit outputs. */,
+    "emitDeclarationOnly": true,
+    "outDir": "./dist" /* Specify an output folder for all emitted files. */,
+    "rootDir": "../" /* Specify the root folder within your source files. */
+  },
+  "exclude": ["dist", "build", "node_modules", ".eslintrc.js"],
+  "include": [
+    "src/**/*.ts",
+    "src/**/*.tsx",
+    "src/**/*.d.ts",
+    "src/**/*.json",
+    "**/*.ts",
+    "test/**/*.tsx",
+    "../packages/**/src/**/*.ts"
+  ]
+}
diff --git a/tsconfig.json b/tsconfig.json
index ea91b53ef9..42ea9f77ec 100644
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -1,45 +1,39 @@
 {
   "compilerOptions": {
+    "declaration": true /* Generates corresponding '.d.ts' file. */,
+    "declarationMap": true, // This will allow code navigation between projects.
+    "target": "ESNext",
+    "module": "Node16",
+    "moduleResolution": "Node16" /* Specify module resolution strategy: 'node' (Node.js) or 'classic' (TypeScript pre-1.6). */,
+    /* Do not emit comments to output. */
     "allowJs": true /* Allow javascript files to be compiled. */,
     "checkJs": false /* Report errors in .js files. */,
-    "composite": true,
-    "declaration": true /* Generates corresponding '.d.ts' file. */,
     "esModuleInterop": true /* Enables emit interoperability between CommonJS and ES Modules via creation of namespace objects for all imports. Implies 'allowSyntheticDefaultImports'. */,
     "forceConsistentCasingInFileNames": true /* Disallow inconsistently-cased references to the same file. */,
     "jsx": "react" /* Specify JSX code generation: 'preserve', 'react-native', or 'react'. */,
     "lib": ["dom", "dom.iterable", "esnext"],
-    "module": "Node16",
-    "moduleResolution": "Node16" /* Specify module resolution strategy: 'node' (Node.js) or 'classic' (TypeScript pre-1.6). */,
-    /* Do not emit comments to output. */
     "noEmit": true /* Do not emit outputs. */,
     /* Concatenate and emit output to single file. */
     "outDir": "./dist" /* Redirect output structure to the directory. */,
-    "paths": {
-      "payload/auth": ["./src/auth/types.ts"],
-      "payload/config": ["./src/config/types.ts"],
-      "payload/generated-types": ["./src/generated-types.ts"],
-      "payload/types": ["./src/types/index.ts"]
-    },
     "resolveJsonModule": true,
     "rootDir": "." /* Specify the root directory of input files. Use to control the output directory structure with --outDir. */,
     "skipLibCheck": true /* Skip type checking of declaration files. */,
     "sourceMap": true,
     "strict": false /* Enable all strict type-checking options. */,
-    "target": "ESNext",
     "types": ["jest", "node", "@types/jest"]
   },
   "exclude": ["dist", "build", "temp", "node_modules"],
   /* Like tsconfig.build.json, but includes test directory and doesnt emit anything */
-  "include": [
-    "packages/**/*.ts",
-    "packages/**/*.tsx",
-    "packages/**/*.d.ts",
-    "packages/**/*.json",
-    "test/**/*.ts",
-    "test/**/*.tsx",
-    "test/**/*.d.ts"
-  ],
+  "include": [],
+  "files": [],
   "ts-node": {
     "swc": true
-  }
+  },
+  "composite": true, // Required for references to work
+  "references": [
+    { "path": "./packages/db-mongodb" },
+    // if you tsconfig is something different
+    { "path": "./packages/db-postgres" },
+    { "path": "./packages/payload" }
+  ]
 }