Step 1: First, you must have ‘Topaz Clean 3’ plug-in to work on. 

Download link and instructions on how to install this plug-in you can found here.

Step 2: Installed? Great. Now open your Photoshop and the picture you want by (File > Open) or (Ctrl + O).

Tip - always choose HQ photos!

I’ve choosen this one:

Step 3: Scale your picture by:

cropping (click ‘Crop Tool’ in Tools window or click ‘C’ on keyboard);

or:

re-sizing - (Image > Image Size);

Mine photo is already scaled, so I don’t have to do Step 3.

Step 4: Now go to Filter > Topaz Labs > Topaz Clean 3, choose ‘Cartooned’ preset  and apply this settings:

Now your photo looks like this:

Step 5: Go to Filter > Sharpen > Smart Sharpen and apply this settings:

Step 6: Finally you can add your PSD.

Step 7: Now flatten your image. Click Layer > Flatten Image. At the end save your image. Done!

Tip - always save images in .png!