Photoshop Clipping Masks

A student of mine recently asked for this, so I thought I'd just throw it out there just in case anyone else was having trouble with it. As usual there are a multitude of ways to do this. I just happen to like the way of least resistance. Of course, this technique works with any shape, including text.

1. Open the file you want to be a rounded rectangle instead of a square image. .
2. Choose the rounded rectangle Shape tool. You need to make sure you put in the radius of the rectangle you want before you use it. Say 15.
3. Go ahead and draw your rectangle to the size you want inside your image. (It will make a layer so if the size isn't right, go to Edit and Free Transform to change the size.)
4. Make sure you have the image layer chosen. You may need to double click it and give it a new name. Anything besides our locked-down default Background will do because nothing can go undeneath a locked down layer.
5. Take the Shape layer and drag it under the image layer.
6. Hold down your Option/Alt key and click once you see the overlapping circle symbol when your cursor is between the 2 layers. Then you should see the an arrow in the layers panel, and your shape in the image only when looking at the image.

This is a Clipping Mask. A clipping mask is always great because it is non-destructive to the image. It also means you can apply any Layer Effect to the shape, and both the image and the shape is moveable. A non linked mask.