Printing onto card is the best idea if you want your tags to last – paper will only rip and tear, especially when a lot of ink has been applied.
When your tags are printed out its time to start cutting. This is where you can involve the kids of you want (remember to be careful with scissors and have younger children use safety scissors).
Once the tags are cut out you'll need to punch hole in them. Alternatively you can just stick them to the gift.
Using a hole punch will give you a clear circle (which is much easier for kids to put string through). You can also just push holes through using a pencil.
The tags can be finished off with string or ribbon so you can tie them to your gift.