In this technique, we'll add some extra canvas size and apply a bevel and emboss to a stroke layer to create a "floating frame" effect.
Press Command-J (PC: Control-J) to duplicate the Background layer.
From the Image menu, choose Canvas Size (or press Command-Option-C [PC: Control-Alt-C]). Make sure the Relative checkbox is turned on, and enter 1 inch in both the Width and Height fields.
Press-and-hold the Command key (PC: Control key) and click on the Create a New Layer icon at the bottom of the Layers palette to create a layer below the current layer. Fill the new layer with white by pressing D to set your Foreground and Background colors to the default, then pressing Command-Delete (PC: Control-Backspace).
Press-and-hold the Command key (PC: Control key) and click on the thumbnail for the duplicated photo layer (Layer 1, in this example) to load it as a selection. From the Select menu, choose Transform Selection and while pressing-and-holding the Option key (PC: Alt key), click on a corner handle and drag the box outwards. Make the selection considerably larger than the photo.
It is tempting to use the settings in the Options Bar to scale the selection by percentage, but be careful: if you use the same percentage for both width and height, the selection will not be even (unless you have a square photo). I would certainly never claim to be a mathematician, but with some experimentation I found that using 107% for the width and 110.5% for the height produced the result I was looking for. (Disclaimer: This is only a guidelineyour results may vary. Follow manufacturer's instructions for best results.)
Click on the Create a New Layer icon to add a new layer at the top of the layer stack, and from the Edit menu choose Stroke. Enter a large width (I used 14 pixels), set the Location to Inside, and choose a medium-to-dark gray color (click on the color swatch to bring up the Color Picker). Click OK and press Command-D (PC: Control-D) to Deselect.
With the stroke layer still active, click on the Add a Layer Style icon at the bottom of the Layers palette and choose Bevel and Emboss from the pop-up menu. Change the Technique to Chisel Hard and increase the Size setting slightly.
In this example, I changed the Gloss Contour setting in the Bevel and Emboss layer style to Peaks.
Variation 1: Peaks contour
Here, I changed the white layer below the photo layer to black. To do this, simply press D to set the Foreground to black and press Option-Delete (PC: Alt-Backspace) to fill the layer with your Foreground color.
Variation 2: Black background
This version has a gray layer below the photo (click on the Foreground color swatch at the bottom of the Toolbox and choose a medium gray from the Color Picker), and the stroke layer was changed to a much darker gray.
Variation 3: Gray background with darker gray stroke