Q – I am confused about pen names. When would I use one—and why? Then, how do I let the publisher know I want to use one?
A – There are a number of reasons: (1) If the subject is of a sensitive nature and you want to remain anonymous, or need to protect the identity of family or friends. (2) If you sell repeatedly to the same publisher, they sometimes will either ask you for a pen name or assign you one so it looks like different people are writing the articles. (3) If you are writing in different genres and prefer to use a different name for each genre to avoid confusing the readers. (4) Or, if you are a man writing in a woman's field, or vice versa.
Generally, you will want to use your own name as you build your reputation and following as a writer. If you are using a pen name on a book, it complicates things when you have an opportunity to promote the book personally. Do you do so under your own name or the pen name? It can be particularly troublesome when you are using a pen name to protect your identity or the identities of others. You never want to use a pen name unless you have a specific reason for doing so.
The next part of your question has to do with letting the editors know when you want them to use a pen name on an article or book. Generally speaking, most editors will not object to using a pen name for you as long as you have a legitimate reason to do so. However, you may find a few who won't do so because they feel it is dishonest, but that is rare.
From a logistical standpoint, when you want the publisher to use a pen name on your piece, you simply list the pen name in the byline (under the title), and put your real name in the upper, left-hand corner with your contact information. If you do so, it is also important to include a cover letter with the submission explaining exactly why you want them to use the pen name when the piece is published. Then if they accept the piece, double-check to be sure they are agreeable to using it. If it is a situation where you are protecting identities, then it will be important that you have that assurance.
The additional question that comes out of this is how the payment will be handled. The check will come to you made out to the name in the upper, left-hand corner, not to the pen name—at least in theory. It sometimes happens that the check is mistakenly made out to the pen name. In that case, you have two options: you can return the check to the publisher and ask them to reissue the check in your name, or you can let your bank know that you may receive some checks made out to the pen name. Generally, they will honor those.