Madrid to Toledo

As soon as the day appears, unless you have no plan. There is no monetary advantage but you may want
peace of mind, tickets in hand.

There are trains at least every hour, so you shouldn't have any problem buying the tickets a day or two in advance at the station. You can save a little money by buying round-trip "Ida y vuelta" tickets for 20.60 euros rather than two, one-way tickets for 12.90 each way. But, buying two, one-way tickets gives you some flexibility, giving you the option to stay as long as you want in Toledo, buying your return ticket at the staiton when you are ready to go back to Madrid.

There is no need or advantage to buying the tickets in advance for Toledo. But if you plan to travel with a smartphone, you can download PassWallet and receive your tickets that way instead of printing them out. I used PassWallet for two trips last May, and it worked flawlessly.

Memark,

You can buy train tickets on the Renfe website up to 62 days in advance.
However, as the others have mentioned, there is no advantage in terms of saving money, for these type of tickets. The price will be €12.90 whether you buy them now or the day you plan to travel.
It's a good idea to buy your tickets 1-2 days in advance to make sure you get the desired time of travel.

If you have the time, I'd suggest you consider spending at least an overnight in this amazing city, so you can experience it's beauty without the hordes of tour bus crowds.

Keep in mind that Puerta de Atocha's train station is huge & it can be confusing if you're not familiar with it, so plan to arrive at least 20-30 minutes prior to your train's departure.

Enjoy your trip!

Buying a day or two in advance is a good idea for two reasons:

1. The Atocha Station is extremely busy and ticket lines can be very long (I've waited 90 minutes before). So buying a ticket to Toledo at the last minute can actually mean a long wait and missing the train you hoped to take.

2. While trains are frequent, it is a popular route and in heavy tourist season, some trains will sell out. So if you plan to take the last train of the day back from Toledo, you should buy that ticket beforehand. Otherwise, or in off-season, you can buy your return ticket at the Toledo Station when you are ready to return home.

Although I would consider December to be off-season, that might not be the case around the holidays.

And it's true that the ticket-buying experience at Atocha is not usually the highlight of ones trip.
But there are ticket-vending machines that are easy to use (you can switch the language to English) as long as you don't have a problem with a credit card or something like that. There are two different kinds of machines, depending on the length of your trip, so you may need to look around a bit. (Different staffed ticket counters, too.) Keep your eyes peeled for a uniformed Renfe employee floating around. They're usually happy to point you to the right place to buy a ticket to your destination.

Tickets sell out . . . period. My visit was in February and I thought I'd have no trouble getting back to Madrid in the afternoon. I got to the station a few minutes before the 3 pm train and it was sold out. I had to wait in the station for the next train, over an hour later.

For planning, note that on the weekends, the first train from Madrid is at 8.50. If you want an earlier start, you need to go between Monday and Friday.

We took the bus from Madrid to Toledo which took about the same time. We bought the tickets the same day. They leave about once an hour. The one advice RS recommends is that you buy your return tickets as soon as you arrive to Toledo to guarantee your way back.