I was recently hired for a new job after being out of work for a month.  I accepted the position a little over a week ago, and though my original start date was the 2nd week in October, informed on Friday that it would be 3 more weeks before clearance was complete and I start work.  The commute is 40 miles/1.5 hours and the pay is more than i was making at my old job and although the work is in the same field, it is a little different.

In the meantime I got an offer for another position that is much closer to my expertise, for $7K more, starting in 2 days, and I get to work from home. I accepted that offer and plan to rescind my acceptance of the other offer.  Benefits are comparable to both, both are full time permanent...these are positions that require master's degrees or more, just for reference. 

My question is, how/when do i go about informing the first position that I am not going to work for them?  I haven't signed any contracts or anything, or filled out any paperwork (other than clearance for the first job which I pay for up front and get reimbursed...which I am not planning to ask for because of this other position, obviously).  Is there a protocol?  I am, however, not planning to tell them until my new job starts and I sign the paperwork (I sent the signed acceptance back today).