Magee scored his 20th goal of the season on a second half penalty kick to lead the hosts to a 1-0 win Saturday and put the Fire on verge of clinching a playoff berth.
Toronto (5-17-11) missed their own chances as they fell to Chicago for the eighth time in 16 all-time meetings.
"We knew we'd have our opportunities, and what we didn't want to do was go down early," Toronto coach Ryan Nelson said. "The chances we had in the first half, they were incredibly good. But we have to finish. We didn't."
Toronto goalkeeper Stefan Frei, making his 2013 debut in goal with Joseph Bendik's one-game suspension, had two saves on the night.
The first was a diving stop on a Juan Luis Anangono header that drew raves from Nelson.
"That save that Stefan made was probably for me the save of the season," Nelson said. "I haven't seen it again but just from watching it live, I can't think of any (better) save that I've seen."
But Frei couldn't stop Magee, who had missed his previous penalty kick try last month against Montreal.
"The last one off the post was in the back of my mind," said Magee, now tied for MLS' scoring lead with Montreal's Marco Di Vaio. "(But) I got up there with all the confidence in the world. I was never going to miss that."
Magee had a free kick into a crowd lined in front of Frei and officials called Toronto for a handball in the ensuing scramble, leading to the penalty kick. The Fire forward then skipped a shot into the back of the net.
"Very disappointing with the penalty kick decision," defender and captain Steven Caldwell said. "We felt that it was a very poor decision by the referee and it cost us a point, or possibly three."
The Fire (14-12-7) are temporarily tied for third in the Eastern Conference with Montreal. A win next Sunday in New York or a loss or tie by New England would lock up Chicago's playoff berth.
Toronto and the Fire tied 1-1 on Sept. 11 at BMO Field. Since then Toronto has dropped four of its last five heading into next Saturday's season finale against Montreal.
A 4-1 victory over D.C. United on Sept. 28 is the lone bright spot in that run.