Crop your photo
Open your image up in Photoshop and with the Crop tool selected, draw out a square over part of your image and hit the enter key on your keyboard to apply the crop.
Canvas size
Now we have an image that looks more like the photo you'd expect to see on a Polaroid but the white frame is currently missing. To add this we first need to extend the canvas size (image>canvas size). Change the amount to pixels and enter an amount that's slightly larger than the image then hit OK.Fill
Create a new layer, rename it 'Fill', drag it under the layer with your photo on and with the foreground colour set to white, hit Cntrl and Backspace on the keyboard to turn the new layer white. We now have a background for our Polaroid to sit on.
White frame
To create the frame we need to create another new layer, rename it 'frame' and position it between the two layers previously created. Select the Rectangular Marquee Tool and draw out a shape to form the white edge of the photograph. Make sure it's even on both sides and extend the frame at the bottom slightly to form the extra bit of space Polaroids have. Then with the new layer selected, hit Cntrl and Backspace on the keyboard to turn the shape white. You won't be able to see it as the background is white but you can press the eye icon next to the background layer if you want to see what the frame looks like.Shadows
Deselect the layer (Layer>Deselect) and double-click on the frame layer to open the Layer Style menu. Click on the drop shadow menu and you'll see a drop shadow is applied to your frame. Adjust the angle to where you want to shadow to be and adjust the size of the shadow to soften it so it blurs slightly more on the background. Next, to give the image that gloss feel Polaroids have we are going to click on the Gradient overlay, select a gradient that goes from grey to white and reduce the opacity to around 30-40%. Once you've done this hit OK.
Move the image
If you to Edit>Free Transform you can now use the anchor points to twist the image slightly if you so wish or have a go at repeating the process on a few other images and create a collage of Polaroids.

If you're more of a fan of black & white Robin Whalley's tutorial will be right up your street: Convert images to black & white.

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