The hydrodynamical properties of the magnetic fluid in magnetic fluid seats are described by a coupled system of nonlinear partial differential equations in a three-dimensional domain with free boundaries. We propose a reduction of the three-dimensional model and describe the resulting two subproblems, the calculation of new boundaries for given flow and magnetic data, and the computation of the flow in a fixed domain, which have to be solved in an iterative manner. We consider in detail the finite element solving strategy for the flow part, which builds the main effort within the overall algorithm and show the results of a numerical test example.