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Photoshop offers a comprehensive set of paragraph-formatting options, including ways to set your justification, alignment, hyphenation, line spacing, and indents. With the exception of the alignment, all these controls appear only in the Paragraph palette and affect text that you create inside a bounding box. (See the section "Creating and Manipulating Text in a Frame" for information about this method of adding text.) Point text, not typed into a bounding box, can be aligned, but the other paragraph formatting cannot be applied to it.
Figure 16.14 shows you the lay of the land in the Paragraph palette and also shows the palette menu, which offers additional paragraph formatting choices.