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I managed to use the 'fuzzy' tool to remove the slightly off white background. However, I want the shape itself to change. For instance, when I drop shadow on the image the shadow is rectangular on the previous outline, of the jpg, not the new rectangular shape. Also, Layers underneath are not visible where I just used the fuzzy tool to remove the background.

I guess using the fuzzy tool and pressing delete just gives a white background on the selected region? I want it to completely remove the background and make it transparent, how do I do that?

PolkaDot
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    This should be asked at https://graphicdesign.stackexchange.com/questions – Terrance Nov 12 '17 at 21:20
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    Jpeg does not support transparency. Use another file type https://stackoverflow.com/questions/16906144/transparent-background-in-jpeg-image – Panther Nov 12 '17 at 21:23
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    You can make an area transparent by adding an alpha channel (under layer->transparency), then select the area that you want to be transparent, then do edit->clear. – John Anderson Nov 12 '17 at 22:08

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