I am a first year graduate student in Physics at a US university. I am on a TAship as usual. For the summer 2016, I have just working for a professor. But I have not liked the project at all and the group environment as well. So I have decided NOT to continue working for the professor. Should I inform it to the professor as soon as possible or, should I wait until the summer ends? And also I would like to know how I should say that and whether there are any 'side-effects' of that or not.
You should check your department's policy to see if it requires you to find a replacement research supervisor in a certain time frame or following a certain procedure. Then you should inform the professor.
Your success as a graduate student will depend on starting your doctoral research as quickly as possible (assuming you are not a masters student). If you are going to change your plans, the sooner you do it, the less harm is done to your own success and that of your department.