1. First lets create a new image 1200 pixels x 1200 pixels 300 resolution, RGB, white background.
2. Choose a pale blue color and fill the background layer. Edit>Fill.
3. Layer>New>Layer. Then select the Rectangular Marquee and make a rectangle something like this.
4. Now go to the top of the screen and you will see some little boxes (just to the left of where it says feather). Hover your cursor over them and words will come up the second box from the right says “Subtract from” just click on that one.
5. Make another rectangle like the one in my image.
6. You should now be able to see the marching ants around both Squares. Click on D then X (D brings up the default colors and X swops them over).
7. We need to fill this selection with white so just do Edit>Fill.Your image and layers palette will now look something like this.
8. Deselect and then we need to give this shape so lets add a bevel to it. Layer Styles>Bevel>Choose Simple Bevel then go to the layers palette and you will see a little (f) against your Polaroid layer. Double click on this and lower the bevel size to about 8.
There you have your finished Polaroid.
You can paste a photograph into the image, resize the photograph using the move tool then place it behind the Polaroid.
Experiment and enjoy :)