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the way I do this is to use the rounded rectangle shape tool.
I go to the top bar where it says "radius" then I enter in a number. I usually use 200 px but you can use more or less to get the look you want. a higher number will give you a more rounded edge, lower number a less rounded edge.
then I open a new layer on top of my photo.
I drag out a rectangle to the size I want it.
you will then have a colored rounded rectangle over the top of your photo.
then you ctrl+click on the layer with the rectangle to select it
then you can click on the photo layer and hit ctrl+c to copy it
then go over to your layout window and ctrl+v to paste the cropped photo on to your layout
i use this all the time and it works great and it's really easy
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