In this paper, we use basic formal variable techniques to study certain categories of modules for the toroidal Lie algebra $tau$. More specifically, we define and study two categories $mathcal{E}_{tau}$ and $mathcal{C}_{tau}$ of $tau$-modules using generating functions, where $mathcal{E}_{tau}$ is proved to contain the evaluation modules while $mathcal{C}_{tau}$ contains certain restricted $tau$-modules, the evaluation modules, and their tensor product modules. Furthermore, we classify the irreducible integrable modules in categories $mathcal{E}_{tau}$ and $mathcal{C}_{tau}$.