Magnetic ionic liquids (MILs) stand out as a remarkable subclass of ionic liquids (ILs), combining the desirable features of traditional ILs with the unique ability to respond to external magnetic fields. The incorporation of paramagnetic species into their structures endows them with additional attractive features, including thermochromic behavior and luminescence. These exceptional properties position MILs as highly promising materials for diverse applications, such as gas capture, DNA extractions, and sensing technologies. The present Review synthesizes key experimental findings, offering insights into the structural, thermal, magnetic, and optical properties across various MIL families. Special emphasis is placed on unraveling the influence of different paramagnetic species on MILs' behavior and functionality. Additionally, the Review highlights recent advancements in computational approaches applied to MIL research. By leveraging molecular dynamics (MD) simulations and density functional theory (DFT) calculations, these computational techniques have provided invaluable insights into the underlying mechanisms governing MILs' behavior, facilitating accurate property predictions. In conclusion, this Review provides a comprehensive overview of the current state of research on MILs, showcasing their special properties and potential applications while highlighting the indispensable role of computational methods in unraveling the complexities of these intriguing materials. The Review concludes with a forward-looking perspective on the future directions of research in the field of magnetic ionic liquids.