Here is an article about finding the right level for your computer sound card. The article uses Windows and its mixer control to teach the point. It shows you how to use Audacity (the free recording software) to play a sample sound at full-scale (the sound blob/wave form is normalized so the loudest point is at the maximum level of 0dB). Then you use the Windows Mixer volume control to turn it up until you start to hear the sound distort (that buzzing awful clipping noise). then you turn the volume control on the Windows mixer down to just below that.
The same concept applies to other operating systems as well. Here is the article with pictures and step-by-step instruction: