The robustness of the gapless topological surface state hosted by a 3D topological insulator against perturbations of magnetic origin has been the focus of recent investigations. We present a comprehensive study of the magnetic properties of Fe impurities on the prototypical 3D topological insulator Bi2Se3 using local low-temperature scanning tunneling spectroscopy and integral x-ray magnetic circular dichroism techniques. Single Fe adatoms on the Bi2Se3 surface, in the coverage range approximate to 1% of a monolayer, are heavily relaxed into the surface and exhibit a magnetic easy axis within the surface plane, contrary to what was assumed in recent investigations on the supposed opening of a gap. Using ab initio approaches, we demonstrate that an in-plane easy axis arises from the combination of the crystal field and dynamic hybridization effects.