Adding Rounded Corners to a Photo
Open a new photograph or image in Photoshop Elements. I am using the picture of my dog Cracker:
Select the Rounded Rectangle Tool from the Tools panel.
Select any solid color for your Rounded Rectangle by clicking once on the Foreground Color selector in the Tools window. The color will not matter because we are going to eventually delete the shape. Ensure that the Background Color is white.
Change the Radius value of your rounded rectangle to 40 px.
Draw a rounded rectangle onto the canvas (this will create a new layer). While holding down the Ctrl key press the letter T to activate the free transform tool as shown below. When you have the rectangle evenly over your photo click the green check mark to set the shape.
Select the rounded-rectangle tool again. Right-click the rectangle and choose Make Selection.
Accept the defaults for the selection (Feather Radius = 0, Anit-aliased is unchecked).
Choose Select and then Select Inverse from the main menu bar.
Click once on the Shape 1 layer. Press the Trash (delete layer) button on the layers panel. This will remove the Shape 1 layer.
When prompted "Delete the layer "Shape 1"? Click Yes.
Click Delete to delete the corners. Then while holding down the Ctrl key click D on the keyboard to deselect the region. Here is my finished product: