You ultimately have to gauge this for yourself, but likely your job is not in jeopardy. Your boss will appreciate you being up front and giving them time to find and train a proper replacement.

I don't think it would be legal/ethical for a boss to fire you just because you got into business school. You can let him know and say plans are up in the air. And then gradually keep him posted. But if you say that you are leaving for sure, I guess they can let you go because that is essentially you giving notice for a few months from now and they may not want you around if you are not going to stay. As I write this I realize how tricky it can be. You have to do what is right for you. If you feel they may let you go then maybe keep it to yourself.

Every situation is different, and you will definitely need to gauge for yourself the sensitivities of your individual situation.

In my case, my two direct supervisors were in the loop from the time I requested them to write recommendation letters. Now that they know I've been accepted, and will be matriculating in the fall, we've had a discussion about when I will be leaving. I made sure that their input was taken into consideration. For example, I was considering leaving in May, but will now be leaving at the end of June so that I can help out on some upcoming projects. It will be a win-win situation. Will I have less time to do some personal stuff I was planning pre-MBA? Sure. Will I be leaving with my relationships with my bosses intact AND some more money in the bank? Yes.

Make the decision that is right for you and your situation.

Good luck

As everyone suggests, this is a case by case thing. Do what you think is best. From my experience, if you are an integral part of the team, openness is encouraged.