1) Open a new, blank document. Drag photo into the new document, which will then reside on its own layer, Layer1.
2) On Layer1, click on the Layer Mask icon at bottom of the Layers palette.
3) On Layer1, click again on the same Layer Mask icon, which now adds a Vector Mask.



5) Make sure that the Vector mask is selected,

and then drag out the rounded rectangle shape. The only part of the photo that will be visible will be everything inside of the shape. If the shape needs repositioning while dragging the shape, hold down the spacebar.
6) Add a rounded border using Stoke. Click on Layer Styles icon at bottom of Layers palette --> Stoke.

7) Finished product

Summarized tutorial from this reference: http://www.photoshopessentials.com/photo-effects/rounded-corners/