The question has nothing to do with FileMaker Server and should have been posted to the FM PRo forum section.
You need a custom page size specified when printing your labels as standard page sizes will be either 11 (letter) or 14 (legal) inches or the european equivalents that are close to these two lengths. 12 inches is not a standard page size so you'll have to work with your Operating system based printer driver settings to specify either a page size of 12 inches or 1 inch. I recommend the 1 inch setting as being more flexible.
Given the 1 inche setting, you can design your label layout without using the labels wizard at all. Just be sure to use printer setup to select your printer, page size and page orientation before trying to create your layout for printing your label.