Step 4: Add A New Blank Layer

With "Layer 2" (the layer we just filled with black) selected, click once again on the New Layer icon at the bottom of the Layers palette:

Photoshop will add a new blank layer between the black-filled layer and the copy of the original image above it:

Step 5: Drag Out A Rectangular Selection As The Inside Of Your First Polaroid

Select the Rectangular Marquee Tool either from the Tools palette or by pressing M on your keyboard:

Then, with the Rectangular Marquee Tool selected, drag out a selection inside your image which will become the inside of the first polaroid (the part which contains the photo). I'm going to drag my selection around the baby's face. It doesn't really matter where you make this selection since you'll be able to move it anywhere you like later:

Step 6: Fill The Selection With Black

We need to fill the selection with black at this point. Technically, it doesn't matter which color we fill the selection with, but to keep things simple and since black is currently our Foreground color, let's use black. Make sure you have the new blank layer selected in the Layers palette, and then use the keyboard shortcut Alt+Backspace (Win) / Option+Delete (Mac) to fill the selection with the Foreground color, which is set to black. Again, nothing seems to have happened in the document, and that's because the image on "Layer 1" at the top is still blocking everything else from view, but if we look at the thumbnail for the blank layer in the Layers palette, we can see that the selected area has indeed been filled with black:

Step 7: Create A Clipping Mask From The Filled Selection

We're going to use the selection we just filled with black to create what's called a clipping mask for the layer above it. What this means is that the layer above it, "Layer 1" which contains the copy of our image, is going to be "clipped" by our filled selection on the layer below it. In other words, the only part of the image on "Layer 1" that will remain visible is the part directly above the section filled with black. The rest of the image will become hidden from view. To create our clipping mask, click on "Layer 1" to select it in the Layers palette. Then go up to the Layer menu at the top of the screen and select Create Clipping Mask. You can also use the keyboard shortcut Alt+Ctrl+G (Win) / Option+Command+G (Mac). Either way, Photoshop "clips" the image on "Layer 1", keeping only the area above the black-filled shape below it visible and hiding the rest of the image, revealing our black background on "Layer 2" in its place:

If we look in the Layers palette now, we can see that "Layer 1" is indented to the right with a small arrow pointing downward on the left. This indicates that the layer is being clipped by the layer below it: