Some of the most famous authors in history had one or more pen names. Pseudonyms have been in use for hundreds of years, for a wide variety of reasons. If you're just starting out, or if you're beginning to write in a new genre, you may be considering using a pen name instead of your legal name. There are good and bad motivations for doing so, and your reason will determine whether it's the right thing to do. 
Switching Names for the Right Reason
Hiding behind a different name isn't necessarily a bad thing. Some authors use pen names because of the world around them.
Reader Expectations
In some book genres, such as romance and science fiction, readers have historically expected authors to be of a certain gender. It's changing now, and readers are more accepting of male romance writers and female science fiction authors, but it can be easier for someone just starting out in the business to adopt the "correct" gender for their name.
Switching Genres
Authors who are well known in one genre can have a hard time getting accepted in another. When Nora Roberts, well-known romance writer, began to write science fiction/mystery novels, she published her series under the name J.D. Robb. The secret didn't come out until the second series was successful, but reader expectations might have made it difficult under the same name.
Unify Identities
Not every collaborating team wants to put all of their names on their book covers. From Carolyn Keene to Ellery Queen, many famous writing duos wrote under a pen name. Today, it's a common practice for genre authors, especially in the romance field, to group together and publish multiple novels, all under the same name, to take advantage of the book marketing benefits you can get from having a large back catalog.
Hiding From the Day Job
Not every employer is accepting of authors moonlighting on their time off. Certain industries can object to subject matter in some authors' catalog. Teachers writing steamy romance novels and members of the military writing spy novels can get into serious trouble if their fiction writing surfaces, so pen names are a much safer way to go.
Not All Reasons Are Good Ones
Some reasons for pen names just aren't worth the risk.
Keeping Away From Defamation
Writing a tell-all book that slanders people you know? Hiding behind a pen name isn't enough to protect you from the law.
Hiding Contract Breeches
If you've signed a contract with a publishing house, giving them a first look at anything else you write, a pen name isn't enough to protect you from a lawsuit. Anything you write, under any name, attaches to that contract.
Taking Advantage of Another's Fame
Got a true crime story in mind? Don't publish it under the name Anne Rules. Also, don't do a series of books about witches and wizards under the name JK Rolling. Some people may fall for your deception, but you won't get away with it for long. Plus, the larger the author, the better the attorney they can afford. Not a good outcome for you.
Keep the Faith and May the Force be with You!
